The 401(k) millionaires club keeps growing. We'll tell you how to join.

A record number of Americans are 401(k) millionaires, thanks to a surging stock market. 

The tally of 401(k) millionaires reached 544,000 in the third quarter of 2024, up from 497,000 three months earlier, according to Fidelity Investments, a leading administrator of employer retirement plans. The figure covers only Fidelity accountholders.  

The number of Fidelity’s IRA millionaires also hit a record, 418,111. 

Few Americans manage to save a million dollars in a 401(k) employee retirement plan or its personal savings counterpart, the Individual Retirement Account. The 544,000 figure represents a little more than 2% of all 401(k) participants at Fidelity. 

And a million dollars is no magic number. Many Americans think you need a lot more than that to retire in comfort. The vast majority of retirees make do on less. 

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“We have an obsession in this country with the word ‘million,’” said  Monica Dwyer, a certified financial planner in West Chester, Ohio. “It seems so big and unattainable.” 

Who wants to be a 401(k) millionaire?

Fidelity isn’t suggesting that everyone needs to be a 401(k) millionaire. Even so, the firm has made a habit of including them in its quarterly retirement reports. 

“If we don’t put it in the press release, we’re going to get asked about it anyway,” said Mike Shamrell, vice president of thought leadership at Fidelity Investments. 

But there is value, Shamrell said, in studying the habits of 401(k) millionaires, especially if you want to become one.  

Most 401(k) millionaires are Gen Xers or Boomers. On average, they have been saving for about 26 years and contribute more than 17% of pre-tax income to their retirement accounts.  

“They’re a great example of staying the course,” Shamrell said.  

In the spirit of inspiring future 401(k) millionaires, here are eight tips for achieving a seven-figure balance in your retirement account. 

Don’t wait to enroll in a 401(k) 

Only about half of American households have retirement accounts, federal data shows. 

The sooner you enroll in a 401(k), financial advisors say, the better chance you’ll become a 401(k) millionaire one day.  

“The number-one rule of retirement savings is to start early,” said Peter Lazaroff, a certified financial planner in St. Louis. 

A good goal: Max out your employer match 

Most 401(k) plans offer a match: The employer matches some or all of the funds paid into the retirement account by the worker. In a typical model, the employer matches half of every dollar a worker contributes, up to a maximum of 6% of the worker’s pay. 

A match is free money, but many Americans don’t claim it. 

“When you don’t take your match, you are leaving part of your employer compensation on the table,” Lazaroff said. 

A better goal: Aim to save 15% of your salary 

One retirement rule of thumb suggests you’re wise to save at least 10% of your pre-tax salary in a 401(k).

With an employer match and a slightly larger employee contribution, 10% can easily become 15%. 

“What we would love to see people do over time is to save about 15%,” said Colin Day, a certified financial planner in St. Louis. “If we can do that for about 30 years, we have that opportunity to grow well into seven figures.”

Can’t afford to save that much now? Set your 401(k) contribution to rise by one percentage point per year, an automated feature in many plans.  

The ultimate goal: Max out your retirement contributions 

If you have enough wiggle room in your budget, planners say, consider pushing your retirement savings to the legal limit. 

For IRAs, the annual contribution limit for 2024 is $7,000, or $8,000 for anyone 50 or older. For 401(k) plans, the maximum employee contribution is $23,000, or $30,500 for people 50 and over. 

Contribution limits go up in 2025, with even higher "catch-up" limits available for people 60 to 63. 

“The goal for every retirement saver should eventually be to try to max out your 401(k),” Lazaroff said. 

Don’t cash out your 401(k) if you leave a job

Research shows workers often cash out low-value 401(k) accounts when they leave a company, potentially losing thousands of dollars of compounded interest over time. 

If you leave a job, experts say, make sure to “roll over” your 401(k), either into an IRA account or a new 401(k) at your next job. 

In 2022, a consortium of private retirement plan providers announced a collaboration to boost the “portability” of small retirement accounts. 

Don’t cash out if the market drops 

In a bear market, some retirement savers panic and sell, hoping to protect their savings from further losses. 

But if you want to be a 401(k) millionaire, experts say, you’d be wise to ride out those slumps. 

While a downturn might lower the value of your retirement account, it doesn’t change the number of stock or mutual fund shares you own. 

Think of those shares as hens. In lean times, the hens lose weight. But you still have the same number of hens. Someday, they will fatten up again. 

Don’t ever raid your 401(k), if you can help it 

The 401(k) is designed to reward those who save for retirement and penalize those who withdraw the money early.  

Early withdrawal, typically before age 59 ½, triggers an additional tax equal to 10% of the sum. If you are paying a 15% tax rate and make an early withdrawal, you effectively lose 25% of the money before you spend a dime. 

There are exceptions, such as for a first-time home purchase or household emergency, which allow you to pay only ordinary income tax on the amount withdrawn. But the goal, with 401(k)s, is to keep the money in the account until you retire. 

Keep saving. Don’t stop. 

As we said, the typical Fidelity 401(k) millionaire has been building retirement savings for about 26 years.  

Don’t be daunted by that figure. If you start saving in your early 20s, and you retire in your early 60s, you can easily string together 30 years of 401(k) savings. 

Let's say you earn $50,000. You contribute 10% to a 401(k), starting at age 25, with your employer offering the standard 50% match, described above. Assuming a 7% annual rate of return, and a yearly 2% raise, your 401(k) balance will reach $1 million around the time you turn 55, according to a Bankrate calculator.

“It’s the old saying,” Shamrell said. “Put time in the market. Don’t try to time the market.”