As the number of 401(k) savings accounts with a balance of $1 million or more increases, the behavior among investors has changed. Almost 30 percent of savers increased their contribution rate last year, giving financial services company Fidelity its highest average 401(k) contribution rate in almost a decade. The rate of female 401(k) millionaires has also increased significantly in recent years, climbing 10 percent in 12 years.
These positive trends are exciting, but even 401(k) millionaires may not yet be ready for retirement. Returns have been high for those with a 401(k) invested in the stock market, but the financial crisis of 2008 should remind us of how quickly trends can change. Instead of taking money out in response to the momentum, investors may benefit more from continuing to save. An investment account with a proper allocation of stocks, bonds, and different asset classes can also help mitigate risk. Consider your financial plan now to help guide you towards retirement.
Start the Conversation Today