- Benzinga Advisor
- Posts
- What The Record Amount Of '401(k) Millionaires' Want From Advisors
What The Record Amount Of '401(k) Millionaires' Want From Advisors
And how you can help them
You're receiving this email because you're subscribed to Advisor from Benzinga. To manage your subscription, click the link at the bottom of this email.
Happy Sunday everyone, and welcome to Benzinga’s financial advisor newsletter.
Today we’re discussing Fidelity’s finding that there’s been a surge in the number of ‘401(k) millionaires’ - and that they’re still very uncertain about their finances, and need professional help.
So, let’s get into the Industry Chatter!
But first, did someone forward you this email? Click here to subscribe!
Lastly, if you would like to be featured in our upcoming Advisor Spotlight and showcase your business in front of all our subscribers, click here to send us an email.
INDUSTRY CHATTER
Fidelity Investments’ Q2 2024 retirement analysis reveals a significant increase in the number of retirement millionaires, with 401(k) millionaires rising 2.5% to 497,000 and IRA millionaires increasing 6% to 398,594. This growth marks the third consecutive quarter of expansion for retirement savers’ assets, driven by strong contribution levels and favorable market conditions.
Contributions At Five-Year Highs
The analysis shows that average account balances have reached near-record highs. IRA balances increased to $129,200, while 401(k) balances rose to $127,100, representing substantial growth compared to five and ten years ago. Generation X account holders have made particularly notable progress, with IRA contributions at their highest level in five years.
Despite these positive trends, Northwestern Mutual’s “2024 Planning & Progress Study” indicates that many millionaires still harbor financial uncertainties. Only 32% of American millionaires consider themselves “wealthy,” and nearly half believe their financial plans need improvement – a huge opportunity for financial advisors. Their primary concerns revolve around the impact of taxes on retirement savings, with many wondering how much money they’ll need for a comfortable retirement and whether they might outlive their savings.
Dipping Into HSAs, Insurance, And Annuities
To address these concerns, millionaires are adopting various strategies. The most common approaches include making strategic withdrawals from traditional and Roth accounts to stay in lower tax brackets, using a mix of traditional and Roth retirement accounts, and making strategic charitable donations. Many are also utilizing health savings accounts, permanent life insurance, and annuities for their tax benefits. Choosing between them, and getting the mix right, is difficult, and a great avenue for financial advisors to bring value to their clients.
Room To Grow For Advisors
The study reveals that millionaires are significantly more likely to work with financial advisers, with 69% doing so compared to 33% of the general population. This trend underscores the value placed on professional guidance in navigating complex financial landscapes and addressing retirement concerns.
While the growth in retirement millionaires is encouraging, the persistent financial uncertainty among this group highlights the ongoing challenges in retirement planning. It emphasizes the importance of comprehensive financial strategies that address not only wealth accumulation but also long-term financial security and tax implications in retirement and points to the needs that financial advisors can help fill.
RESERVE YOUR TICKET NOW
Benzinga - the most trusted source for Small Cap stock news - is hosting a one-of-a-kind networking event on October 10 in Chicago, for Small Cap Investors & public company executives hand picked by Benzinga.
WHAT THE PROS ARE WATCHING
As a financial advisor, staying ahead of market movements is crucial for guiding your clients to success. With Benzinga Pro, you can take your advisory services to the next level by creating custom watchlists tailored to each of your client's unique investment goals and preferences.
Our platform empowers you to monitor big moves in real-time, allowing you to react swiftly to market shifts and keep your clients informed and confident in your expertise. Whether you're tracking specific stocks, sectors, or market indices, Benzinga Pro provides the tools you need to stay informed and proactive in managing your clients' portfolios.
Say goodbye to manual tracking and hello to efficiency with Benzinga Pro's intuitive interface and customizable features. Join thousands of financial advisors who rely on Benzinga Pro to enhance their advisory services and drive better outcomes for their clients.
MARKET RECAP
September’s notorious volatility has once again gripped the markets as cooling jobs data spurred Wall Street into its worst week of the year.
In August, the U.S. economy added 142,000 jobs — a rebound from July's disappointing 89,000 figure but below expectations of 160,000 and significantly lower than the average pace of 202,000 over the past year.
While the unemployment rate edged down slightly from 4.3% to 4.2% as expected — and wage growth exceeded estimates — these figures did little to sway market sentiment. Labor data released during the week simply failed to meet expectations.
As a result, traders are now placing a higher probability on the Federal Reserve cutting interest rates by 50 basis points rather than 25 basis points in September.
Semiconductors were hit by several headwinds, including reports of a potential antitrust investigation into Nvidia Corp. (NVDA) by the Department of Justice and disappointing guidance from major chipmaker Broadcom.
The Philadelphia Semiconductor Index, tracked by the iShares Semiconductor ETF (SOXX), endured its worst week in over two years. Nvidia's shares extended their biweekly losses to over 20%.
Tax Reform Impact
Goldman Sachs warns of potential S&P 500 earnings volatility under tax plans proposed by Kamala Harris and Donald Trump. Corporate tax changes could lead to significant swings in company profits, with implications for market performance, particularly in sectors sensitive to tax policy shifts.
Ford In-Car Ads
Ford Motor Co. (F)’s new patent suggests displaying targeted ads inside vehicles based on location data. The technology could offer drivers advertisements relevant to their driving routes, potentially creating new revenue streams while raising questions about privacy and user experience in connected cars.
iPhone 16 Event
A Bank of America equity analyst suggests Apple Inc. (AAPL)’s imminent iPhone 16 event may drive stock prices higher, countering the usual “sell the news” trend. Anticipated innovations and strong demand could positively impact investor sentiment, with shares potentially benefiting from the product launch excitement.
Fake Ozempic Alert
Counterfeit Ozempic batches are flooding the weight loss market, posing serious health risks. Authorities are raising alarms as demand for the drug surges, increasing the circulation of these dangerous, unauthorized products worldwide.
LEARN WITH BENZINGA PRO
THE WEEK AHEAD
Economic Data
Monday: US consumer credit and inflation expectations
Tuesday: UK unemployment numbers
Wednesday: US inflation numbers and crude oil inventory
Thursday: US core inflation numbers
Friday: Monthly US import and export numbers
Earnings
Click here for the full calendar of economic data and earnings reports.
GROW YOUR BUSINESS WITH BENZINGA
There are two ways Benzinga can help you grow your business: generating leads and keeping your clients engaged.
Generate Leads: 14 million investors visit Benzinga’s site every month. We have hundreds of thousands of email subscribers, exclusive events, topical webinars, and more. We help our audience build wealth, and we partner with advisors like you to help them manage it. Click here to have leads sent directly to your inbox every week.
Engaging Existing Clients: Once these clients are in the door, you need to keep them engaged. Why? Because if you don’t, your competitors will. How do you do this? Consistent content. All of the content above can be sent to your clients under your name. We can also help you create unique content. Click here to ask us about licensing and content creation to keep your clients engaged.