Number of 401(k) millionaires is up, but 40% of households are at risk of a lower standard of living in retirement. How to join the millionaires club

UBS recently described this new class of high-net-worth individuals as “everyday millionaires,” since they tend to maintain middle-class spending habits despite their ballooning accounts. Analysts at UBS also found that these millionaires collectively rose to 52 million globally in 2025 (3).

While the stock market outperformance certainly played a role, many people reached this “moderate millionaire” status thanks to consistent, automated contributions. Data from Vanguard revealed that 45% of 401(k) holders increased the percentage they contributed to their plans in 2024, leading to a 10% rise in aggregate account balances (4).

Although these numbers are fantastic for many Americans, they don’t tell the whole story of retirement readiness. In fact, news of these millionaires hides more worrying long-term financial trends.

The great divide in America’s retirement savings

Recent research from the Schwartz Center for Economic Policy Analysis (SCEPA) paints a bleaker picture of the current state of retirement savings.

According to the newly published report (5), roughly 35% of respondents near retirement age say they feel “on track” to cover their expenses. Meanwhile, researchers also found that about 50% of Americans aged 62-74 didn’t have enough to cover $25,000 per year in retirement. The Center for Retirement Research at Boston College also found that 39% of working-age households are likely to see a decline in their living standards after entering retirement (6).

So, even though more retirees are hitting the millionaire mark in their 401(k)s, they’re still in the minority. Currently, only 16% of retirees claim to have seven-figure nest eggs.

Taking all of these statistics into account, SCEPA doesn’t advise opting for more 401(k) features or higher “catch-up” deposits as a solution for making retirement more achievable. Instead, the researchers proposed federal policies, such as “Guaranteed Retirement Accounts,” alongside higher Social Security standards (5).

If these plans aren’t implemented, SCEPA warns that America could maintain its higher-than-average rate of elder poverty (currently 23%) compared to other industrialized nations.

How everyday savers can become everyday millionaires

While it’s true that more Americans than ever have $1 million in their 401(k)s, most people are still far from achieving that goal.

For instance, a Northwestern Mutual survey found that most Americans have $88,400 saved for retirement, which is well below the $1.46 million target that many respondents feel they should have in their accounts (7).

Whether you care about hitting $1 million or not, the most beneficial strategy to becoming retirement ready is to focus on cultivating the patience and boring behaviors that create wealth over time.

As a rule of thumb, plan to direct 12% to 15% of income toward retirement, including your employer’s match. This combined savings rate keeps you on track to get the most out of compounded growth over the long haul and take advantage of any “free money” your employer offers.

Another common strategy many 401(k) millionaires use is automated annual increases. As the name suggests, this tool raises your contribution amount each year, and it often coincides with raises, so you don’t feel as much of a hit in your day-to-day spending.