401(k) Millionaire Count Dips Despite Record Worker Savings Rate

Fidelity Investments reported on May 28, 2026, that the number of 401(k) millionaires in its plans declined by 3.8% quarter-over-quarter. This drop occurred even as the average employee savings rate climbed to a record 9.9% of their salary. The average 401(k) balance fell by approximately 1.5% to $112,400, according to the asset manager's quarterly data release. The juxtaposition of falling account balances and peak savings discipline underscores the dominant influence of market performance on retirement outcomes.

Context — [why this matters now]

The decline in 401(k) millionaires follows a quarter of heightened volatility across major equity indices. The S&P 500 experienced a correction in late Q1, retreating from record highs as inflation data surprised to the upside and Federal Reserve policy expectations shifted. This market pullback is the primary catalyst for the quarterly decrease in high-balance accounts, which are more heavily weighted toward equities. The current environment of elevated interest rates has also pressured bond values within diversified portfolios.

The last comparable decline in 401(k) millionaires occurred in Q2 2022, when a 6.7% drop coincided with the onset of a bear market. The current 3.8% decline is less severe, reflecting a market correction rather than a sustained downturn. The record savings rate suggests workers are responding to economic uncertainty with increased financial prudence. This behavior is consistent with patterns observed during periods of market stress, where individuals often focus on factors within their direct control.

Data — [what the numbers show]

Fidelity’s data reveals several key metrics for the first quarter. The number of 401(k) accounts with a balance of $1 million or more fell to 422,000 from 438,700 in the previous quarter. The average 401(k) balance decreased from $114,100 to $112,400. The average individual retirement account (IRA) balance also declined by 1.5% to $116,600.

Savings behavior showed notable strength. The average savings rate reached 9.9%, the highest level since Fidelity began tracking the metric. A significant 38% of workers increased their contribution rate during the quarter. The following table shows the change in average account balances for Q1 2026 compared to Q4 2025.

Account Type	Q4 2025 Balance	Q1 2026 Balance	Change
401(k)	$114,100	$112,400	-1.5%
IRA	$118,400	$116,600	-1.5%

Gen Xers, the cohort closest to retirement, continue to hold the highest average 401(k) balance at approximately $178,900, despite a similar percentage decline. The data indicates that while market forces impacted all cohorts, long-term savers with larger balances experienced the greatest absolute dollar losses.

Analysis — [what it means for markets / sectors / tickers]

The data reinforces the direct correlation between broad market performance, tracked by indices like the SPDR S&P 500 ETF Trust (SPY), and retirement account health. Asset managers like BlackRock (BLK) and T. Rowe Price (TROW) face potential headwinds from lower average assets under management, which can impact fee revenue. Conversely, record savings rates provide a steady inflow of capital into target-date funds and other institutional products, offering a stabilizing counterbalance for these firms.

The record-high savings rate could have a mild deflationary effect on the economy by reducing immediate consumer disposable income. This may slightly pressure consumer discretionary stocks in sectors like retail (XRT) and leisure. A primary counter-argument is that the decline in millionaire accounts could be temporary if markets rebound strongly in Q2, as many balances are near the $1 million threshold. Institutional flow data indicates continued net inflows into US equity funds, suggesting long-term investor conviction remains intact despite quarterly volatility.

Outlook — [what to watch next]

The trajectory of 401(k) balances in Q2 will be determined by the performance of equity markets and key economic releases. The next Federal Open Market Committee meeting on June 18 will provide critical guidance on the path of interest rates. The May Consumer Price Index report, due June 12, will be a major catalyst for market sentiment and, by extension, retirement portfolio valuations.

Analysts will monitor whether the 9.9% savings rate is sustained or if it reverts toward the long-term average near 8.8%. A key level to watch for the S&P 500 is 5,200; a sustained break above this resistance could quickly reverse the Q1 decline in millionaire accounts. The Q2 data from Fidelity, expected in late August, will provide the next substantive update on these trends.

Frequently Asked Questions

How does the 401(k) millionaire count correlate with the stock market?

The number of 401(k) millionaires is highly correlated with the performance of the S&P 500. These high-balance accounts are typically heavily allocated to equities after decades of accumulation. A market correction of 5-10% can push a significant number of accounts that were near the $1 million threshold back below it. The rebound in millionaire counts following the 2022 bear market was swift, illustrating this direct link to index levels.

What is the typical asset allocation for a 401(k) millionaire?

Fidelity data from previous reports indicates that 401(k) millionaires typically have an equity allocation between 70-80% of their portfolio. They also exhibit lower trading activity than the average saver, favoring a long-term buy-and-hold strategy. A common trait is consistent maximum contributions over many years, taking full advantage of employer matching programs and tax-deferred compounding growth.

Are younger investors saving at different rates than older generations?

Yes, savings behavior varies by generation. While the overall average is 9.9%, Millennials have been increasing their savings rates at a faster pace, often leveraging automated escalation features. Baby Boomers, many of whom are in or near retirement, tend to have lower contribution rates as they transition to withdrawal phases. Gen Z, though a smaller portion of the dataset, has the highest average allocation to target-date funds, which automate the investment process.

Bottom Line

Market volatility, not saver behavior, drove the Q1 decline in 401(k) millionaires despite record-high contribution rates.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. CFD trading carries high risk of capital loss.