There are now 441,000 retirement accounts with $1 million or more, pushed up by record-high stock markets, according to Fidelity.
The U.S. stock markets are closed today for Presidents’ Day but that hasn’t stopped the steady climb in after-hours trading. Dow Jones Industrial Average (DJIA) futures drifted higher on Monday, following Asian and European markets.
With the Dow on the verge of all-time highs, retirement accounts are booming. According to Fidelity, there are now a record number of millionaire IRAs and 401(k)s.
Dow futures contracts crept 5 points higher on Monday ahead of a quiet trading session.
S&P 500 futures and Nasdaq Composite futures were up 0.36% and 0.65% respectively after finishing at record highs on Friday.
The numbers out of Fidelity are impressive. 441,000 retirement accounts managed by the firm now have $1 million or more. That’s 1.6% of all Fidelity’s managed retirement accounts.
The value of retirement accounts rose across the board in the last quarter.
The average 401(k) balance rose to $112,300, a new record high and a 7% increase from last quarter’s balance of $105,200 – Fidelity report
It comes as the S&P 500 and Nasdaq closed at all-time highs on Friday.
The numbers aren’t all good news. While a small group of “super savers” are pushing into millionaire status, most retirees don’t have enough saved.
According to the same Fidelity report, Baby Boomers only have a median $69,900 saved as they hit retirement age.
As the median amounts in this study show, millions of Americans over the age of 55 have too little saved for a comfortable retirement, and not enough time to save significantly more.
CCN.com looked into this retirement crisis over the weekend, reporting that Baby Boomers may be forced to take more risk and further inflate a stock market bubble.
The next part of this bubble phase, driven by the baby boomers is, ‘oh shit we can’t save enough money so we must take as much equity risk as possible again because we’re in our retirement years. Go go go!’ – Raoul Pal, former hedge fund manager.
With the stock markets at record highs, investors have broadly shrugged off the coronavirus threat. Latest figures stand at 1,775 deaths and more than 70,000 cases of infection. But there are wider fears that the virus has breached the window of containment and will spread globally.
Elsewhere on the markets, China’s central bank lowered its interest rate and pledged to support the markets in the face of coronavirus impact. Japan’s economy reversed faster-than-expected, with GDP coming in 6.3% down in the last quarter.
Earnings season slows to a trickle with Glencore, Walmart, and HSBC preparing reports this week. Federal Reserve meeting minutes are released on Wednesday.