Somewhere in the United States, roughly 665,000 workers opened their 401(k) statements in early 2025 and saw a seven-figure balance staring back at them. Fidelity Investments, which administers more than 48 million retirement accounts, reported the milestone after the S&P 500 delivered back-to-back annual gains exceeding 20% for the first time since the late 1990s. Vanguard and Empower reported similar surges among their own participants. By any measure, it was a banner moment for the 401(k) system.
But the celebration has a sharp edge. According to the Federal Reserve’s Survey of Consumer Finances, the most comprehensive federal snapshot of household wealth, the median retirement account balance among families that actually held such accounts was about $87,000 in 2022, the most recent data available. Factor in the tens of millions of working-age adults who have no retirement account at all, and the effective midpoint drops dramatically. By estimates grounded in SCF methodology, roughly half of American adults have less than $45,000 set aside for retirement. A significant share have saved nothing.
That gap between the top and the floor has become one of the defining financial fault lines in the country, and the market rally that minted a record class of 401(k) millionaires has only widened it.
How the millionaire count grew so fast
The path to a seven-figure 401(k) is less mysterious than it sounds. It requires three ingredients sustained over decades: consistent contributions near the annual maximum, a heavy allocation to equities, and the discipline to stay invested through downturns.
Consider a worker who began maxing out contributions in the early 2000s and held a diversified stock portfolio through the 2008 financial crisis, the 2020 pandemic crash, and the 2022 bear market. Each recovery rewarded that patience handsomely. The S&P 500’s total return from its March 2020 low through early 2025 exceeded 150%, a windfall that compressed what might have taken a decade of saving into a few years of compounding.
Employer matching amplified the effect. Fidelity’s data showed the average combined savings rate among its participants, including both employee and employer contributions, hovered near 14% of pay, close to the 15% benchmark many financial planners recommend. For workers earning six figures who sustained that rate year after year, crossing the million-dollar threshold became a matter of time rather than luck.
No single federal database tracks seven-figure 401(k) balances across all plan providers, so the true nationwide count is almost certainly higher than 665,000. But even Fidelity’s figure represents a tiny fraction of the roughly 70 million Americans who actively participate in defined-contribution plans.
Why the median tells a different story
The Federal Reserve’s analysis of the 2022 SCF makes the concentration of retirement wealth hard to ignore. Families in the top income quintile held the vast majority of retirement account assets. Families in the bottom two quintiles were far less likely to have any retirement account at all.
The divide starts with access. Bureau of Labor Statistics data from March 2024 shows that about 73% of private-industry workers had access to an employer-sponsored retirement plan. Among part-time workers, access fell to roughly 40%. Workers at firms with fewer than 50 employees were significantly less likely to be offered a plan than those at large corporations.
Even when a plan exists, participation is not automatic for everyone. Lower-wage workers often face a painful trade-off between contributing to a 401(k) and covering rent, childcare, or medical bills. The SCF data reflects this clearly: families earning below the national median income had far lower participation rates and far smaller balances, a pattern that has persisted across every survey wave for decades.
Market rallies make the arithmetic worse, not better, for those at the bottom. A 25% gain on a $500,000 portfolio adds $125,000. The same percentage gain on a $10,000 balance adds $2,500. Over years of compounding, that difference becomes a chasm. And the tariff-driven volatility that rattled markets in spring 2025, followed by a sharp recovery, served as yet another reminder that workers with larger balances and longer time horizons are best positioned to ride out turbulence and capture gains on the other side.
What SECURE 2.0 changes, and what it does not
Congress took its most significant swing at the access problem with the SECURE 2.0 Act, signed into law in December 2022. Its centerpiece provision requires new 401(k) and 403(b) plans established after December 29, 2022, to automatically enroll eligible employees at a contribution rate of at least 3%, escalating by 1 percentage point per year up to at least 10%. That mandate took effect for new plans in 2025 and is designed to pull in workers who might never have opted in on their own.
The law also expanded catch-up contribution limits for workers aged 60 to 63, raised the age for required minimum distributions, and created new provisions for emergency savings accounts linked to retirement plans. These are meaningful steps, but they share a common limitation: they apply primarily to workers who already have access to an employer-sponsored plan. They do not reach the roughly one-quarter of private-sector workers whose employers offer no plan at all, nor do they cover the growing ranks of gig workers, freelancers, and self-employed individuals who fall outside the traditional employer-plan framework.
Several states have moved to fill that gap with auto-IRA programs. California’s CalSavers, Illinois’s Secure Choice, and Oregon’s OregonSaves require employers that do not offer a retirement plan to automatically enroll workers in a state-facilitated IRA. Early data from these programs shows that auto-enrollment does boost participation among lower-wage workers, though average balances remain modest given the programs’ relatively recent launch dates. As of mid-2026, more than a dozen states have enacted or are implementing similar programs, a patchwork approach that still leaves millions of workers in states without such mandates uncovered.
Age matters more than the average suggests
Aggregate retirement savings statistics can be deeply misleading without age context. A 30-year-old with $45,000 in a 401(k) is ahead of most benchmarks and has decades of compounding ahead. A 58-year-old with the same balance faces a fundamentally different situation, with limited time to grow savings and a looming transition out of the workforce.
Fidelity’s age-based data illustrates the spread. Among plan participants in their 20s, the average balance was around $13,000 in early 2025. For those in their 40s, it climbed past $120,000. For participants in their 60s, the average exceeded $400,000, but that figure is pulled sharply upward by the millionaire cohort at the top. The median for that age group was considerably lower, reflecting the large number of older workers who started saving late, experienced career disruptions, or cashed out accounts during job changes.
Those cash-outs remain a persistent drag on long-term outcomes. Research from the Employee Benefit Research Institute has found that a significant share of workers who change jobs cash out their 401(k) balances rather than rolling them into a new plan or IRA, particularly those with smaller balances. Each cash-out resets the compounding clock and typically triggers income taxes plus a 10% early withdrawal penalty for those under 59½, eroding the very savings the system was built to protect.
The squeeze that record balances cannot hide
The tension between record highs at the top and thin savings at the bottom is not an abstraction. It carries real consequences that will intensify as baby boomers move deeper into retirement and younger workers contend with elevated housing costs, lingering student debt, and wage growth that has only recently begun to outpace inflation in sustained fashion.
Social Security, still the primary source of retirement income for most Americans, faces its own funding pressure. The Social Security Board of Trustees projected in their most recent annual report that the combined Old-Age and Survivors Insurance and Disability Insurance trust funds could be depleted by the mid-2030s, after which incoming payroll taxes would cover only a portion of scheduled benefits. For workers with little in personal savings, any reduction in benefits would land immediately and hard.
Inflation adds another layer. Even as nominal 401(k) balances hit records, the purchasing power of those dollars has been eroded by cumulative price increases that exceeded 20% from early 2020 through 2024. A $1 million balance in 2025 buys meaningfully less in retirement than it would have five years earlier, a reality that even the millionaire cohort cannot ignore.
The 665,000 workers who crossed the seven-figure mark earned that milestone through years of disciplined saving, favorable market returns, and employer contributions. Their success is real. But they represent a sliver of the workforce, and the system that produced them still leaves tens of millions of Americans approaching retirement with savings that would barely cover a single year of expenses. Whether policymakers, employers, and workers themselves can broaden that system fast enough to narrow the gap remains the most consequential retirement question of this decade.
David M. Keller is a finance writer based in Columbus, Ohio, covering personal finance and consumer-focused economic topics. He earned his degree in journalism from Ohio University and began his career reporting on local business and economic trends for a regional media outlet. Since then, he has contributed to a variety of online publications, focusing on clear, practical coverage of topics such as cost of living, debt, and everyday financial decision-making.
