According to the 2025 Northwestern Mutual Planning and Progress Study, Americans estimate that achieving a comfortable retirement will cost around $1.26 million. Hitting a savings target of $1 million is seen as a positive step.
There’s a silver lining from Fidelity: their analysis reveals that for the third quarter of 2025, the count of 401(k) millionaires has surged to a record high of 654,000.
Even with ongoing inflation and uncertainty in the markets, saving for retirement is clearly still a top priority for many.
Retirement saving rates have remained robust, and a rise in market values has bolstered overall savings. Contributions from both employees and employers have reached a combined total of 14.2% of employee pay.
On top of that, the average 401(k) balance now stands at $144,400, marking a 9% increase from Q3 of 2024. Notably, Millennials and Gen Z are leaning towards Roth IRAs more, with 19% and 20% of participants, respectively, contributing to these accounts.
Long-term savers are also seeing their balances climb. It seems that most of the 401(k) millionaires are from the baby boomer generation.
Becoming a 401(k) millionaire might be more achievable than many think. The main thing is to save consistently and to get started as early as possible.
For instance, if you invest $400 a month into your 401(k) for 41 years with a 7% annual return, your total contribution of $197,000 could grow to over $1 million due to compound interest. But if you cut that timeline to just 31 years, you’d end up with around $490,000. This highlights the importance of steady saving over time.
If $400 per month feels out of your reach, consider starting with a smaller amount and gradually increasing it. One possible strategy is to use an app that helps you invest your spare change.
This app can round up your daily purchases to the nearest dollar and invest the difference in a diversified portfolio. So, your morning coffee or grocery bills could help you build savings without much effort.
Additionally, if you opt for a monthly recurring deposit, you might get a bonus investment. Let’s get started.
On the other hand, if you prefer to handle your investments independently, you might want to consider platforms that allow you to invest without commissions. For a limited time, some options provide up to $1,000 in stock when you deposit funds into a new account.
Plus, there are resources designed to help you learn as you go, offering real-time investment news and tools to assist you in making informed choices.
Regardless of the path you choose, starting your savings early can really capitalize on the benefits of compound interest. Interestingly, a significant portion of the growth from a 7% return comes from those last ten years of saving.
Investing in real estate has long been a popular way to accumulate wealth. However, if you’re not quite ready to dive into homeownership, there are newer platforms that open the door to the market more easily.
For qualified investors, home-sharing investments provide access to a substantial portion of the U.S. housing market, typically dominated by large institutions.
With a minimum entry of $25,000, this approach allows investors to buy into numerous properties across major cities without the usual responsibilities of property management.
This hands-off method tends to yield a risk-adjusted rate of return between 12% and 18%. You can invest in occupied residential properties across various regional markets.
There’s also another option that targets multifamily and industrial real estate, requiring a $100,000 minimum investment. This company has been a significant player in the private real estate investment sector for decades.
They’ve consistently delivered strong returns, with a historical internal rate of return on their investments since 2004 reaching impressive levels.
Moreover, this investment firm puts a significant portion of its own capital into each transaction, aligning its interests closely with those of its investors.
If you’re not an accredited investor, platforms like Arrived can get you into the real estate market with investments starting as low as $100.
This platform offers shares in carefully selected rental and vacation homes, backed by notable investors, allowing wider participation from various income levels.
Thanks to flexible amounts and straightforward processes, both accredited and non-accredited investors can tap into this part of the market without much hassle.
