Secret to 401(k) millions: What most Gen Xers and boomers don’t want you to know

401(k) millionaires hit record highs — The number of Americans with at least $1 million in their 401(k) accounts has soared to an all-time high, according to new data from Fidelity Investments.

As of the second quarter of 2025, more than 595,000 workers now sit in the so-called “401(k) millionaire club,” with a median balance of $1.4 million.

The overwhelming majority of these millionaires are Gen Xers and baby boomers who stuck to the basics: steady saving, resisting panic during downturns, and letting compounding do the heavy lifting over decades.

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Fidelity’s research shows that most 401(k) millionaires have been saving for around 25 years. That means they lived through — and didn’t flee during — the dot-com crash, the 2008 financial crisis, and the COVID-19 pandemic.

“This population of savers is a great example that saving for retirement is a marathon, not a sprint,” said Mike Shamrell, vice president of thought leadership at Fidelity.

The point is critical: there wasn’t a secret stock pick that vaulted them to millionaire status. Instead, the key was consistency — regular contributions, employer matches, and staying invested through market turbulence.

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Contribution rates matter — and most got them right

A big differentiator between 401(k) millionaires and average savers is how much they contributed. In Q2, the average total savings rate (including both employee and employer contributions) stood at 14.2%, nearly hitting Fidelity’s 15% recommended benchmark.

Breaking it down:

• Employee contributions: 9.5% of income
  
  
• Employer contributions: 4.8%
  
  

This disciplined approach meant that even when markets dipped, savers continued building their nest egg. For many, the payoff was measured not in a single lucky quarter but in a steady upward climb over decades.

Riding out volatility proved more powerful than timing

The second quarter wasn’t smooth sailing. The S&P 500 gained 10.9% overall, but only after a rough start. Even so, just 5.5% of retirement savers made changes to their allocations. And among those, 80% adjusted only once.

That restraint mattered. By resisting knee-jerk reactions, most investors benefited when the market rebounded. In short: the millionaire club was built by time in the market, not timing the market.

IRAs boosted the edge for Gen X and boomers

Fidelity also highlighted that IRA contributions are rising sharply among older generations:

• Gen X: up 25% year over year
  
  
• Baby boomers: up 37% year over year
  
  

Pairing 401(k)s with IRAs provided additional compounding power and tax advantages, giving many savers an extra push toward the seven-figure milestone.

The bigger picture: why millionaire status is rare

While 595,000 401(k) millionaires is impressive, it’s worth remembering that this represents only a tiny slice of the population. Federal Reserve data shows that just 2.5% of Americans hold $1 million or more in retirement accounts. Even among retirees, the figure is only 3.2%.

The lesson? For most workers, millionaire status won’t happen overnight — or for everyone. But consistent habits, employer matches, and long-term investing dramatically improve the odds.

Hidden risks: loans and emergencies

Not everything in the report was rosy. 19% of workers have loans outstanding against their 401(k)s, up from 18% a year ago. And while only 2.8% took out new loans, experts warn this trend underscores the need for separate emergency funds.

As Shamrell noted, many withdrawals happen for urgent but manageable needs — a broken car or medical bills — showing that even disciplined savers remain financially vulnerable without cash reserves.

What younger savers can take away

The biggest misconception is that 401(k) millionaires relied on perfect timing or high-risk bets. In reality, the blueprint is surprisingly simple:

• Start early — even small contributions in your 20s grow substantially over decades.
  
  
• Save consistently — aim for 15% including employer match.
  
  
• Stay the course — don’t panic when markets wobble.
  
  
• Diversify smartly — balancing 401(k) with IRA contributions pays off.
  
  

For millennials and Gen Z, the message is clear: you don’t need to “beat the market” to join the millionaire club. What you need is patience, consistency, and time.

FAQs:

Q1. How did most 401(k) millionaires build their wealth?
By contributing around 14% of income for 25 years, staying invested through market downturns, and letting compounding drive long-term growth.

Q2. What does Fidelity data reveal about 401(k) millionaires in 2025?
Fidelity reports a record 595,000 401(k) millionaires with a median balance of $1.4 million, reflecting steady savings and market recovery.