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Number Of 401(k) Millionaires Hit New Highs Amid Worsening Economic Inequality
Dawson County Journal ^ | 11/19/2020 | Tyler Durden

Posted on 11/19/2020 7:43:27 AM PST by SeekAndFind

Fidelity, the largest 401(k) provider in the US, has just released its third-quarter analysis titled "Building Financial Futures" that outlines the number of 401(k) millionaires hit a new high during the pandemic, reported WaPo.

Fidelity said client balances of more than one million dollars for 401(k) accounts increased to 262,000, up 17% from the previous quarter. The number of IRA millionaires also increased to 234,000, up 15% in the quarter. Both breached the highs recorded in4Q19 when Fidelity reported 233,000 401(k) millionaires and 208,000 IRA millionaires.

Market performance was primarily the reason for increases in 401(k) account balances in 3Q20. Despite the market plunge in October, from July 1 to Sept. 30, soaring main equities indexes boosted retirement balances, a spokesman for Fidelity told WaPo.

Despite the virus-induced downturn, resulting in the decimation of small and medium-sized firms, along with millions of job losses, the recovery has primarily been a Federal Reserve induced bonanza, one where trillions of dollars were pumped into capital markets by the central bank, igniting stock prices to record highs.

This all suggests that the Fed is unintentionally worsening economic inequality by providing the most help to capital markets while leaving the working-poor to fend for themselves with lousy government stimulus checks that expired at the end of July.


TOPICS: Business/Economy; Culture/Society; News/Current Events
KEYWORDS: 401k; inequality; millionaires
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To: dhs12345

I doubt it, because the state government workers, teachers, etc. all feel that they have SACRIFICED to be in PUBLIC SERVICE for all those years, and are entitled to their huge retirement benefits. They believe they would be so much better off, had they opted to work in the private sector for their careers.

So, no. They will be the last to be considered for any penalties. In fact, it is more likely that OUR money is taken, to prop up their public pensions.

JMHO


61 posted on 11/19/2020 8:44:42 AM PST by NEMDF
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To: Turbo Pig
Vapor money; if the lefties take control of the government...POOF, gone in a puff of tyrannical good intention faerie smoke.

Well, they might not like me if I have nothing left to lose.

62 posted on 11/19/2020 8:47:31 AM PST by IYAS9YAS (There are two kinds of people: Those who can extrapolate from incomplete data.)
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To: SeekAndFind

If you worked in the private sector, you’re bad, and we need to take your money.
How much is a government pension worth? With healthcare? An awful lot more. A new retiree in California (CalPers) gets more than $40k a year. Over twenty years (60-80), that’s $800k, which doesn’t include healthcare benefits and coverage. By the way, there are 1.6 million receiving CalPers benefits. Add the other 49 states, Federal government, etc. Who outnumbers who?
All the government pensions are underfunded. The game is to take private retirement accounts, and use them to fund the government pensions. Denigrating the private sector employees who don’t receive pensions is the start of the game.


63 posted on 11/19/2020 8:56:30 AM PST by Consistent
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To: NEMDF

You are probably correct. That is way the government operates and it is selective socialism at it worst. And they will have a lot of advocates in the government considering State employees work for the government. They are beholding to each other.


64 posted on 11/19/2020 8:58:20 AM PST by dhs12345
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To: All

Folks...the most obvious thing that is missing from this discussion is how can this be accomplished?

If government decides to confiscate 401k’s, then it will be worthless for both them an us...The majority is stock based, so someone has to sell stocks to get some value. If government all of sudden “owns” our stocks, then stock market would crash immediately.

The fear alone of govt take-over ahead of time (they wouldn’t be able to do this immediately - got go through Senate, House, etc...) would cause the general population to start selling (even at a penalty), which would also cause a crash.

I think, the process will be very gradual....like including a 1% buy, 1% sell tax just like Mutual Fund Managers do, so that it doesn’t have such an impact to the stock market. Stinks, but much more tolerated by everyone. The question will be how much is the fee? Existing, grandfathered Balances, could also be taxed at a small annual rate so as to not affect stockmarket….


65 posted on 11/19/2020 9:14:06 AM PST by Maringa ( )
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To: brownsfan
You consider 11 or 12k a year living large?

Sure. In most 3rd world countries that would be considered lower middle class.

66 posted on 11/19/2020 9:15:28 AM PST by glorgau
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To: Skywise

RE: 260,000 millionaires... Out of a US population of 328,000,000

Note the article: Fidelity said client balances of more than one million dollars for 401(k) accounts increased to 262,000, up 17% from the previous quarter.

That’s just Fidelity. What about the other hundreds of 401(k) trustees like Vanguard, T. Rowe Price, TD Ameritrade, etc.


67 posted on 11/19/2020 9:55:53 AM PST by SeekAndFind
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To: Dead Corpse

They have already floated confiscation with a new goobermint means tested replacement


68 posted on 11/19/2020 9:57:31 AM PST by Ouderkirk (Life is about ass, you're either covering, hauling, laughing, kicking, kissing, or behaving like one)
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To: SeekAndFind

Ok - let’s multiply that by 4 - one million millionaires out of 328,000,000

That’s proof of income inequality?


69 posted on 11/19/2020 10:20:07 AM PST by Skywise
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To: Hazwaste
In our younger years, my wife and I did without many of the luxuries that we saw others in our generation buying so that we could shovel as much into our 401K as possible. Now that we’re millionaires, the people that blew (or still blow) their money on the latest crap want to tell me it’s unfair. Well screw them!

That's my story too. While our associates were going on cruises and Disney trips, we were taking modest driving vacations. While they were buying mcmansions, we were buying a modest home. We still have a few years to go before using the 401k, but are nearly a millionaire, and it just pisses me off that the government is going to claim it is unfair.

Screw them. If you take my 401k I want a yearly cruise or trip to Europe, or whatever.

And if you "forgive" student loans, I want a refund on what I paid (and missed other vacations and toys because).

70 posted on 11/19/2020 10:43:55 AM PST by T. P. Pole
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To: Skywise

Multiply that by the hundreds of the other number of asset management companies. I just mentioned 4 of them, the etc. at the end are for hundreds of others.


71 posted on 11/19/2020 10:50:31 AM PST by SeekAndFind
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To: SeekAndFind

It’s STILL a microscopic amount. It’s not proof of income inequality at all.

And note the article doesn’t make the assertion based on “all of them” it bases it just on Fidelity’s numbers.


72 posted on 11/19/2020 11:16:25 AM PST by Skywise
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To: glorgau

“Hey! If you put that in amount 30 year Treasuries (after paying income taxes on the principal leaving maybe $700K) @ 1.62% you could get 11 or 12 thousand dollars a year for doing nothing!”

I remember when i was in Jr. High you could get 12-15% via a CD. Now, after saving a lifetime to accumulate some $$, you get 1.62%!!!!


73 posted on 11/19/2020 12:05:16 PM PST by utax
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To: brownsfan

“A million in a 401k isn’t wealthy.”
______________________________

That’s the truth. I know from experience it *sounds* like a lot.

Folks are living off those 401Ks. They set monies aside their entire working lives, to prevent themselves from having to rely on any welfare system in their older years. These people knew from the beginning that the Social Security System was set up as a part of retirement, not the entire retirement amount.

I believe that as the Welfare System grew, it caused the older folks or middle-aged working class to assume the Social Security System would also give them the funds to live as they lived during their working years.

Hope that makes sense.....


74 posted on 11/19/2020 2:16:39 PM PST by Notthereyet (May the Lord God Find 10 Good Men In America. Amen. )
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To: Starboard

Oui are on the same page.


75 posted on 11/19/2020 3:11:22 PM PST by Migraine ( Liberalism is great (until it happens to YOU).)
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To: SeekAndFind
Having a million dollars in your 401(k) is an admirable achievement but it in no way guarantees the luxurious retirement people think it would.

Using the 4% rule, which is the maximum amount you should draw from a 401(k) to ensure it lasts over your lifetime, that will amount to $40,000/year.

Added to the average Social Security benefit of $1,514/mo (or about $18,000/year), the average 401(k) millionaire might have around $60,000/year to live on the rest of their lives. Maybe $100K on the upper side of things (with the maximum Social Security benefits)

Now that's not too shabby for most but hardly the lifestyle of a millionaire that most of us picture with the carefree lifestyle on golf courses, yachts, chauffeured limos, munching on cold shrimp from an iced bowl, etc.

With $2.5 million, now you can easily draw $100,000 a year and your Social Security checks can be used as play money. That's what most of us should be aiming for.

76 posted on 11/20/2020 6:21:45 AM PST by SamAdams76 (Orange Man GOOD!)
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To: SeekAndFind

They’ll make a move on 401k plans soon. They’ve been talking about doing it for years.

You didn’t really think they were going to leave all that money just sitting there, did you?

L


77 posted on 11/20/2020 6:27:08 AM PST by Lurker (Peaceful coexistence with the Left is not possible. Stop pretending that it is. )
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To: Lazamataz

“ This article is nothing more than setting up the 401k steal.”

Yep. This plan goes back more than a decade. Google up Teresa Ghilarducci sometime.

L


78 posted on 11/20/2020 6:29:56 AM PST by Lurker (Peaceful coexistence with the Left is not possible. Stop pretending that it is. )
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To: Hazwaste
Ant and the Grasshopper.

Lot of grasshoppers out there.

79 posted on 11/20/2020 7:12:32 AM PST by SamAdams76 (Orange Man GOOD!)
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To: Free in Texas
According to one CPI website a buck is worth 9 cents in 2020 compared to 1950. so a million in an IRA is worth $90,000.00 in actual buying power. Dammit.

Not exactly. It took 70 years for that dollar to become today's 9 cents. Anybody retiring today with a million dollars will be long dead before they need to worry about that.

Also, you are not taking into consideration the earnings on that million dollars (if invested wisely).

A million dollars is actually not terrible for a typical new retiree collecting social security at age 67. Taking 4% of that in the first year of retirement is about $40,000. If the person is making about $2,000/mo in social security (conservative), the total income is now $64,000. Not counting any extra money a retiree can pull in doing side work. That is more than adequate for most people. Especially if you retire debt free (which you should).

That brings the balance down to $960,000 after the first year but even if invested conservatively, you will likely get at least a 3-5% return, putting you right back to about where you started.

If you stick to the 4% rule, you will not run out of money for at least 30 years, but which time you will be 95 and probably content to just sit in your rocking chair and collect what's left of social security. Most retirees will never see 90, never mind 95.

But I just described worse case scenario (for one with a million dollars in retirement savings). If the past 30 years are any guide, and you stick to the 4% rule, you will see much better than 3-5% annual returns. In that case, your nest egg will continue to grow as you age and you'll be leaving your kids with a million bucks or more.

I think people worry too much about retirement. Work as long as you can, save as much as you can, and you will find a way. But a million dollars in a 401k makes a comfortable retirement very doable (despite many saying it's not enough).

80 posted on 04/03/2021 2:54:57 PM PDT by SamAdams76 (By stealing Trump's second term, the Left gets Trump for 8 more years instead of just four.)
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