$1m Nest Egg?
How many people have $1m saved in their 40(k)?
This is a great question and worth considering since the idea of a $1 million nest egg has long been set before us as a goal or objective to aim for.
Any idea what percentage of people have $1m saved in a 401(k)? How about $500k saved?
10%?
20%?
More?
Of the almost 25 million 401(k) plans studied in a recent survey found less than 3% of them had over $1m. This is actually a new record for 401(k) millionaires but is still very few people.
Currently, there are about 70 million participants in such plans and they hold about $9 trillion of assets (about 25% of retirement assets)
Another study found that less than 5% of Americans have over $500k saved for retirement.
When you layer that data over the census data that only a third of people ages 15-64 have a 401(k) type plan it paints a picture that very few Americans have sizable amounts saved for their future financial needs.
Plans like the 401(k) are often used so that only the highest earning employees are able to leverage their benefits with additional features like cash-balance plans, deferred comp plans or other features you never knew about that can be tacked on to the traditional 401(k) we are all used to.
For the average worker making $65,000 and putting 5% in and getting a 5% match, after 20 years of contributing they will probably barely crack the $250,000 mark of total 401(k) savings. Whereas, higher earning employees or business owners might be able to contribute and have that total in a matter of 2 or 3 years.
This underscores the reality that retirement may be a target that is closer to poverty than a life of leisure for 9 out of 10 Americans.
If you want to learn more check out the following articles.
https://www.aol.com/many-americans-socked-away-least-202147796.html
As always, if you come across a financially related article you’d like to send my way please do!
Best place to send them is to me.
More next time!
Jonathan