December 14, 2021
It’s Possible to Become an IRA Millionaire
By Jeremy Quittner
Retiring with seven figures isn’t as far-fetched as it sounds. In fact, the retirement accounts of the newly wealthy are exploding these days.
- There are now a record-breaking 412,000 401(k) accounts¹ with $1 million or more, according to Fidelity Investments, the largest provider of investment savings accounts. That’s a reported 84% increase compared to 2020.
- Similarly, the number of IRA accounts with at least $1 million increased to 341,000, a 64% jump compared to last year.
- And the average IRA account this year reportedly had more in it than the average 401(k) account.²
Here are three things you can do right now that can help put you on a path toward a million-dollar retirement.
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Investment advisory services offered by Stash Investments LLC, an SEC registered investment adviser. Investing involves risk and investments may lose value.
“Retirement Portfolio” is an IRA (Traditional or Roth) and is a non-discretionary managed account. Stash does not monitor whether a customer is eligible for a particular type of IRA, or a tax deduction, or if a reduced contribution limit applies to a customer. These are based on a customer’s individual circumstances. You should consult with a tax advisor.
Roth IRA: Withdrawals of the money (Contributions) you put in are penalty and tax free. Prior to age 59½, withdrawals of interest and earnings are subject to income tax and a 10% penalty. All earnings are tax free at age 59½ or older, assuming your first contribution was more than 5 years prior. Income Eligibility applies.
Traditional IRA: Withdrawing prior to age 59½, generally means you’re subject to income tax and a 10% penalty. Withdrawals after age 59½ are only subject to income tax but no penalty.
While you can fund both an IRA and 401(k) in the same year, some income limits could apply.
¹Bloomberg.There Are More 401(k) and IRA Millionaires Than Ever (2021). Retrieved from https://www.bloomberg.com/news/articles/2021-08-19/ira-401k-millionaire-retirement-accounts-jump-75-to-record-at-fidelity?sref=Ggil5LTk
²CNBC. Number of 401(k) and IRA Millionaires Hits Record One Year After Covid, Fidelity Says. Retrieved from https://www.cnbc.com/2021/05/20/fidelity-number-of-401k-millionaires-hits-record-a-year-after-covid.html