Record 665,000 401(k) Millionaires Boost Vanguard Total Stock Market ETF Demand
The number of US 401(k) millionaires surged to a record 665,000 by end-2025, with average balances up 11% to $146,100 despite market volatility. Investors averaged a 14.2% savings rate and increased allocations to low-cost ETFs like Vanguard Total Stock Market ETF to capture 17% S&P 500 gains.
1. Surge in 401(k) Millionaires
US retirement accounts saw a record 665,000 401(k) millionaires by the end of 2025, driven by strong market gains and disciplined savings. The average account balance rose 11% year-over-year to $146,100, reflecting both contributions and investment returns.
2. Market Performance in 2025
Broad indices posted robust returns in 2025, with the S&P 500 up nearly 17%, the Nasdaq Composite climbing over 20%, and the Russell 2000 advancing about 13%. This performance underpinned the wealth accumulation in retirement plans.
3. Role of Vanguard Total Stock Market ETF
Vanguard Total Stock Market ETF offers low-cost, comprehensive exposure to US equities, mirroring the broad market performance that drove retirement account growth. Investors outside 401(k) plans have adopted this ETF in IRAs and brokerage accounts as a core holding.
4. Savings Discipline and ETF Strategies
Workers maintained an average savings rate of 14.2%, including employer contributions, and nearly 40% boosted their contribution rates. This disciplined approach, combined with diversified ETF allocations, remains crucial for long-term wealth building.