Improve Your Odds Of Being A 401(K) Millionaire
Money|May 2018

A seven-figure nest egg is within grasp—if you invest like a cheapskate.

Elizabeth O'Brien And Walter Updegrave
Improve Your Odds Of Being A 401(K) Millionaire
STRONG STOCK MARKET RETURNS over the past few years have helped create a record number of 401(k) millionaires, according to Fidelity, the country’s largest administrator of workplace retirement plans.

Some 150,000 of Fidelity’s savers had seven-figure 401(k) accounts as of the end of last year, up from 93,000 a year earlier. While these supersavers represent just 1% of the company’s 15.3 million retirement plan participants, they show a positive trajectory.

Now, if you’re worried that this trend could reverse course should the bull market slow down, Fidelity raises this important point: This new group of millionaires wasn’t born out of stock market gains alone. Retirement accounts were also buoyed by contribution rates that rose to 8.6% at the end of 2017, up from 8.4% a year ago. “2017 was a good year for retirement savers—not only because of the stock market’s performance but because many investors took positive steps toward managing their retirement savings, such as increasing their contribution rate,” noted Kevin Barry, Fidelity’s president of workplace investing.

THE OTHER SECRET TO 401(K) SUCCESS

Besides maintaining a high savings rate and having the discipline to stay invested in a diversified mix of stocks, bonds, and cash, what else can you do to boost your chances of amassing wealth?

One easy strategy is to figure out how much you’re losing to fees in your retirement accounts—and then to do something about that.

A recent TD Ameritrade survey of 1,000 investors found that only 27% knew how much they were paying in their 401(k)s. Worse still, nearly 60% either didn’t know if their plan levied fees or mistakenly believed they weren’t being charged anything.

This story is from the May 2018 edition of Money.

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This story is from the May 2018 edition of Money.

Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 8,500+ magazines and newspapers.