Millionaires On Paper: 401(k) and IRA Holders See Record Profits Amid Pandemic, Market Surge

The number of people with over $1 million in their retirement savings has set a new record, buoyed by a soaring stock market. Investment dividends, however, belie a split recovery, with the wealthy raking in profits as the working class faces persistently high unemployment rates.

The new record comes courtesy of data from Fidelity, the largest purveyor of 401(k) savings accounts. The bank logged 365,000 clients with over $1 million tucked away, more than twice as many as a year earlier.

The number of IRA account millionaires also set a new record, at 307,600.

Jessica Macdonald, a vice president at Fidelity Investments, told CNBC it was a result of long-term planning and changing habits around savings accounts in addition to stock market gains.

“These are people making it a goal to do as much as possible with these retirement accounts,” she said. “It’s not something that happens overnight, it’s really an example of staying the course and taking a long-term approach.”

Fidelity’s numbers show 17% of workers increasing their retirement contributions, aided by a record 37% of employers automatically enrolling new hires in company plans.

The number of savers having to withdraw money from their retirement accounts was cut by more than half, going from 6.1% at the end of 2020 to 2.4% almost six months later.

The growth persists even when accounting for the pandemic driving down metrics in 2020. Overall account balances have surpassed the value they heald before COVID-19 hit.

Still, not every American sees a reason to celebrate. The labor market’s recovery has persistently lagged behind expectations, and almost all conservative states are moving to slash benefits for the unemployed.