Retirement destroyed, savings lost, 401k plans wiped out?
COVID-19 be damned, the numbers of 401k millionaires are back up near record highs according to the latest data from Fidelity Investments. An incredibly strong second quarter for the stock market translated to big rebound gains for 401k accounts, with Fidelity reporting the number of individuals with 401k plan balances of $1 million or more in plans where Fidelity is recordkeeper spiking 49% compared to the end of the first quarter to land at 224,000.
The ranks of 401k millionaires have gone up and down like a yo-yo lately, with the all-time high of 233,000 being hit at the end of Q4 2019 before plunging back to 150,000 during the first quarter of 2020 as the pandemic hit. A year ago, Fidelity showed 196,000 401k millionaires at the end of Q2.
The big jump in millionaire ranks this second quarter can obviously be attributed to the surprisingly strong rally by the stock market during that timeframe. Wall Street experienced its best quarter since 1998 between the beginning of April and the end of June, with the S&P 500 gaining nearly 20% to counter the coronavirus-fueled 20% drop suffered in the first three months of the year, the market’s worst quarter since the 2008 financial crisis.