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Fidelity Investments, one of the world’s largest asset managers, has reported a record number of 401(k)/IRA millionaires. The firm revealed that its clients had reached a record high of 365,000 401(k)/IRA millionaires in the first quarter of 2021, an increase of 32% from a year ago.

The rising number of millionaires can be attributed to a combination of factors. Firstly, the stock market has rebounded from its lows last year when the COVID-19 pandemic caused widespread panic and market volatility. Secondly, millions of Americans continue to save and invest for their retirement through 401(k)s and IRAs, and the rising stock market has led to a significant increase in the value of these retirement accounts.

Fidelity’s report also showed that the average IRA balance climbed to $130,000 and the average 401(k) balance was $123,900 in Q1 2021, representing a 24% and 22% increase, respectively, from a year earlier.

The report provides some encouraging news for retirement savers who may have been worried about the impacts of the pandemic on their finances. It also highlights the importance of saving for the long term and not making short-term investment decisions based on market fluctuations.

Fidelity further reported that it has seen an uptick in investment in its Roth IRA accounts, which allow investors to make after-tax contributions and receive tax-free withdrawals in retirement. The firm found that 90% of its Roth IRA account holders were making contributions, an increase of six percentage points from a year ago.

The record number of 401(k)/IRA millionaires also demonstrates the effectiveness of employer-sponsored retirement plans. By offering retirement benefits to their employees, employers are helping them save for their future while also attracting and retaining talent.

The report is a good reminder for all employees to review their retirement savings and consider increasing their contributions if possible. It is also important to consult with a financial advisor to ensure that your retirement savings are diversified and aligned with your long-term financial goals.

In conclusion, Fidelity’s report on the record number of 401(k)/IRA millionaires is a positive sign for retirement savers and the overall strength of the US economy. It reinforces the importance of long-term retirement planning and highlights the value of employer-sponsored retirement plans. However, it is important for individuals to continue to review their retirement savings and seek professional advice on the best investment strategies.