Retirement savers achieved record balances in their 401(k) balances in 2014—thanks in part to the stock market's gains—but the biggest winners were the thousands of workers who became newly minted millionaires.
The average 401(k) balance hit a record high of $91,300 at the end of last year, according to new data from Fidelity Investments, the largest provider of 401(k) plans. Only a tiny fraction of the company's 13 million plan participants ever reach the million-dollar mark, but that number has grown sharply in the past two years.
About 72,000 workers had amassed $1 million or more in their 401(k) retirement plans at the end of 2014, according to Fidelity. That's nearly twice as many as in 2012 and almost five times as many as a decade ago.
Many just made the mark: More than half of the 401(k) millionaires had balances of $1 million to $1.25 million at the end of 2014, while 39 percent had $1.25 million to $2 million; 9 percent had more than $2 million saved.
"The stock market in the past two years has really pushed people over that threshold," said Jeanne Thompson, a vice president at Fidelity. "They're investing for growth. These 401(k) millionaires hold 72 percent equities or equity mutual funds on average—and only 12 percent of that is company stock."
Yet a surging stock market was not the only secret to the success of 401(k) millionaires. Fidelity's research found three traits that these millionaires share, which every retirement saver should adopt:
Most important, 401(k) millionaires are steady savers. "They really are heeding the right advice," Thompson said. "Starting early and staying for the long term."