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How did 769,000 Americans become 401(k) millionaires despite rising retirement worries?
Fidelity has 769,000 401(k) millionaires as strong markets and steady savings lift accounts, but most Americans still worry about having enough for retirement.
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The number of 401(k) millionaires has hit a record high.The number of Fidelity Investments 401(k) accounts with at least $1 million reached 769,000 in the second quarter of 2026. The number of million-dollar accounts jumped 19% in just three months.
Fidelity said the number of 401(k) millionaires rose 19% from the first quarter to the second quarter. The increase was helped by a strong stock market and high employee contribution rates. But 401(k) millionaires are still a very small group. Fidelity manages about 25.8 million 401(k) accounts, and only around 3% of them have balances of at least $1 million. Fidelity provided the figures cited by CBS News.
How 401(k) millionaires saved $1 million
So how did these workers reach $1 million? Saving for a long time is a major reason. Many 401(k) millionaires are older workers who have been saving regularly for decades, according to Michael Shamrell, vice president of thought leadership at Fidelity Investments, who spoke to CBS News.
Why long-term saving matters
Fidelity says the important lesson is not the $1 million target itself. Shamrell said Fidelity does not want workers to believe that everyone needs exactly $1 million for retirement. Retirement needs are different for every person, so some people may need more money while others may need less.
The bigger lesson is how these workers saved. Shamrell said people should look at the saving habits and behaviour that helped these workers build large retirement accounts. His main point was that consistently saving money for a long period can make a big difference.
Workers are still saving heavily despite higher everyday costs. Americans are dealing with higher gas prices, grocery bills and utility costs, but many workers have continued putting money into their 401(k)s. The average 401(k) contribution rate stayed at a record 9.6%. Fidelity said the average employee contribution rate was 9.6% in the second quarter, matching its record high, according to CBS News.
Fidelity says workers have not pulled back on retirement savings. Shamrell said the company was encouraged to see people maintaining their contribution rates despite the financial pressures they faced during 2026. A strong stock market also helped push retirement balances higher. The S&P 500 rose 15% in the three months ending June 30, giving retirement accounts invested in stocks a major boost.
How the stock market helped 401(k) savings
The stock market's gains have been even bigger over longer periods. The S&P 500 was up about 20% over the previous 12 months and roughly 71% over the previous five years as of the end of the second quarter. Strong company profits have helped support the stock market. Investors largely looked past problems such as inflation and geopolitical tensions and focused on strong corporate earnings, CBS News reported.
AI demand has also helped drive corporate earnings. Strong demand for artificial intelligence has supported companies and their profits, which in turn has helped the broader stock market. Tax breaks from last year's Republican-backed legislation also supported earnings. CBS News noted that tax breaks included in the Republicans' “big, beautiful bill” were another factor supporting corporate profits.
Why Americans still fear retirement
Yet the rise in 401(k) millionaires has not removed retirement fears. Even as stock markets and retirement account balances have risen, many American workers remain worried that they will not have enough money to retire comfortably.
Also read: Why is the S&P 500 at risk of a crash? CAPE ratio, Fed rates and Trump policies raise concerns
Nearly seven in 10 workers are worried about their retirement savings. A recent survey by financial services company NFP found that 72% of workers said they were behind on their retirement savings. For the average worker, $1 million is still far away. Fidelity's average 401(k) account balance was only $155,800 as of June 30, showing the huge gap between the typical account and the $1 million milestone.
Average 401(k) balance remains low
Other retirement accounts also had much lower average balances. The average 403(b) balance was $145,000, while the average IRA balance was $144,523, according to Fidelity data cited by CBS News. This explains why Americans can feel worried even when markets are doing well. A rising stock market can increase retirement account balances, but most workers are still nowhere close to having $1 million saved. Their concerns about whether their savings will last in retirement therefore remain.
Inflation keeps retirement worries high
Inflation and the cost of living remain major worries. Fidelity found that workers continued to be concerned about inflation, the cost of living and geopolitical tensions, despite the improvement in their retirement accounts. People felt more positive when asked about their own finances. Fidelity found that workers had a better outlook when the question moved away from the broader economy and focused on their personal financial situation.
About one-third felt positive about their own financial position. Shamrell told CBS News that around one-third of people surveyed felt really good or very positive about their personal financial situation. He said this could partly be because of the positive retirement savings numbers.
The big takeaway is that the 769,000 millionaires are not proof that Americans are financially secure overall. Their success shows what can happen when workers save consistently for decades and benefit from long-term market growth. But with 72% of workers saying they are behind on retirement savings and the average 401(k) balance at $155,800, the typical American worker still faces a very different retirement picture.
