Further confirming that those with access to workplace retirement plan should take advantage of those offerings and, when possible, maximize contributions, the number of 401(k) millionaires reached another record in the third quarter.
Fidelity Investments points out that as of Sept. 30, there were 654,000 401(k) millionaires, an increase of 59,000 from the end of the second quarter. Of course, equity markets need to cooperate, but the number of workplace retirement plan millionaires could break records anew in 2026 because the contribution limit is jumping to $24,500 from $23,500 this year.
“According to Fidelity Investments®’ latest Q3 2025 retirement analysis, average 401(k), IRA and 403(b) account balances reached new record highs in Q3, driven by consistent savings and positive stock market performance,” notes the asset manager. “The average 401(k) balance increased 5% from its previous record high in Q2 and marked the sixth quarter-over-quarter average balance increase in the last eight quarters (since Q3 2023). Despite ongoing concerns about the strength of the economy, both 401(k) and 403(b) participants were able to maintain steady savings rates through the third quarter.”
Young Workers Are Joining the Party
Simple math dictates that baby boomers who are still working and Gen X would comprise the largest percentages of 401(k) millionaires because they’ve been working the longest, but don’t shortchange millenials and Gen Z – two demographics that are increasingly prioritizing retirement savings. Of note to advisors is the point that Gen Z is embracing Roth retirement vehicles over traditional equivalents.
“Roth savings vehicles are increasing in interest among retirement savers, particularly among younger generations, likely in large part due to their tax-efficiency over the long term,” adds Fidelity. “Third quarter’s data shows 20% of Gen Z 401(k) participants are choosing to contribute to a Roth 401(k). Similarly, Roth IRAs continue to be the IRA of choice among younger savers, with Gen Z investing 95% of their contributions in Roth accounts (rather than a traditional IRA).”
Data suggest younger investors are staying the course and that includes the coveted Gen Z demographic. Not only that, but enrollment rates are trending higher.
Another point to consider is that this is prime avenue for advisors to enhance relationships with younger clients because it appears some need help navigating the laws of small and large numbers. A new survey confirms younger demographics are increasingly devoted to retirement savings and that could spell opportunity for advisors.
Clients Are Getting the Retirement Message
In addition to the increase of 401(k) millionaires and the uptick in retirement prioritization among younger generations, the Fidelity survey is a positive for advisors and clients alike because it confirms that despite all the talk about the U.S. retirement crisis, clients aren’t sitting idly by. They’re taking action and that likely makes them receptive to advice and education.
“Americans are continuing to exhibit impactful savings behaviors such as staying the course and focusing on long-term goals, which clearly is having a positive effect on retirement savings,” said Sharon Brovelli, president of Workplace Investing at Fidelity Investments. “To see balances and saving behaviors increase across all savings vehicles is encouraging, especially as savers continue to navigate an uncertain economic environment.”
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