The count of 401 (k) and IRA millionaires hit its second highest level in the second quarter despite the pandemic that forced a large part of the economy to a standstill.
The number of 401 (k) million was increased to 224,000 from 150,000, a jump of 49% from the first quarter, according to an analysis of more than 30 million pension accounts from Fidelity Investments provided exclusively to Yahoo Money. The number of IRA millionaires increased by about 30% to 204,000 from 157,000.
Read more: Retirement Plan: Everything You Need to Know
The totals for each step reached the record high each in the fourth quarter of 2019, when there were 233,000 401 (k) million and 208,000 IRA millionaires.
But remarkably, the increases took place in April, May, and June when tens of millions of Americans lost their jobs or were placed on furlough during state exoduses, especially in those first two months.
“Stable deposits and no panic or emotion for emotions will always yield good results,” said Amit Chopra, managing partner at Forefront Wealth Planning and Asset Management, a financial firm. “Keep in mind that most 401 (k) s are heavily invested in the indexes, which means that people were heavily exposed to Facebook, Apple, Amazon, Netflix and Alphabet actions, such as Microsoft, which are less affected by COVID. “
Pension balance rebounded after last quarter’s dip
It wasn’t just millions who had a reason to celebrate. The average balance sheet of 401 (k) and IRA also returned to dips in the first quarter, according to the company’s press release, thanks to a 21% increase in the S&P 500.
Average IRA balances were $ 111,500, a spike of 13% from the previous quarter and an increase of 0.9% from a year ago. Meanwhile, the average balance for 401 (k) plans per employer jumped to $ 104,400, a gain of 14% from the first quarter.
“This is not at all surprising to me, because I’ve been telling people for years that there is a ‘mutual fund for food,'” said Steve Kruman, an investment adviser at Bryce Wealth Management, a financial firm. “Every week large sums of money are contributed nationally by employees and are agreed in parts by many employers. [and] all that flows into the market, and these must be invested for those workers. ”
Nearly 9 in 10 people – or 88% – continued to contribute to their 401 (k) in the second quarter, which was only a slight drop-off from the record high of about 90% in the first quarter. One in 11 investors increased their contribution rates.
Read more: How to stay on course for retirement during the pandemic
Even those who fought the pandemic on the front lines remained steadfast in their pension investments. About 96% of health care workers, which includes hospitals, retained or increased their contribution in the second quarter, according to the report.
Millennials remain committed to their future for retirement
The pandemic also saw an impetus in millennial savings rates in the second quarter, with the number of IRA accounts owned by the generation rising by more than 23% year over year.
Roth IRAs, retirement accounts funded by post-tax income, saw the biggest jump with a 36% year-over-year gain in the number of accounts and a 50% increase in contributions.
One expert attributed the growth to a cut in spending, such as gas and food.
“It is not surprising that individuals used the extra capital generated from lower expenditures to invest in retirement programs,” said Ron Oertell, chief financial officer at LendingUSA, “especially as the market rises.”
Dhara is a reporter for Yahoo Money and Cashay. Follow her on Twitter at @Dsinghx.
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