The average 401(k) account balance, at $127,100, is still below its 2021 highs — but there are now half a million Americans with more than $1 million in their 401(k) accounts just at Fidelity alone.
Why it matters: It’s a sign of how the wealthy benefit disproportionately from tax breaks on retirement savings.
Between the lines: Many Americans don’t work full-time for employers who offer 401(k) plans or similar.
Of those who do, most aren’t able to save the maximum amount possible — this year, $23,000.
Even fewer max out their contributions every year for decades on end, without withdrawing money for life’s regular expenses.
And even fewer still have the risk tolerance necessary to put all their retirement funds into the stock market, rather than a more standard mixture of stocks and bonds.
The bottom line: The kind of people who are able to accumulate a seven-figure sum in their 401(k) accounts are precisely the people who are rich enough not to need tax incentives to save for retirement.
But they’re the people who benefit the most from those incentives all the same.
