SUNDAY, MAY 29 , 2022. THE WASHINGTON POST EZ EE G3
If you have a personal finance
question for Michelle, please call 1-
855-ASK-POST (1-855-275-7678). Her
award-winning column The Color of
Money is syndicated by The
Washington Post News Service and
Syndicate and carried in dozens of
newspapers.who reach the millionaire status
typically have a 15 percent
savings rate that includes a
combination of what they’re
putting in their account along
with a matching contribution
from their employer.
My husband and I pushed our
eldest daughter to invest
15 percent of her pay into her
401(k) offered by her company
earlier this year. Not long after
that, the stock market started to
plunge. Her balance has been
dropping since she started
investing.
“Where’s my money going?”
she keeps asking, rolling her
eyes after watching financial
news reports on the stock
market. Give it time, we tell her.
For individuals who have
been participating in their
401(k) plan for the last 15 years,
Fidelity says the average
account balance has grown to
$482,900, up from $64, 900 in
the first quarter of 2007, which
was right on the cusp of the
Great Recession. “Long-term
investing is one of the best
things we try to get across when
there is volatility,” Shamrell said.
Did you drop from the 401(k)
millionaire’s club? Did you
change your investment strategy
as a result of losing your 401(k)
millionaire status?
Send your comments to
[email protected].
Please include your name, city
and state. In the subject line put
“Millionaire’s Club.”Because they have been in the
game quite a long time, they
understand that shifts are a
normal part of the economic
landscape.”
Some did flee to safer
investments. Fidelity found that
more than 5 percent of 401(k)
savers moved into more
conservative investments
within their 401(k) account in
the first quarter this year.
However, that low portion
indicates that the vast majority
of workplace retirement
investors have not been
spooked by the downturn in the
stock market, at least not yet.
The quarterly retirement
analysis from Fidelity also
showed that while average
account balances declined
because of the poor
performance of the stock
market, the total 401(k) savings
rate reached record levels.
The total savings rate for the
first quarter reached 14 percent,
just short of Fidelity’s suggested
savings rate of 15 percent. ThoseVolatility in the stock market
at the end of 2018 resulted in a
nearly 29 percent drop in the
number of 401(k) millionaires.
Still, this elite group continued
to sock money away in boring
mutual funds. They have a
history of staying calm when the
stock market is chaotic. It’s how
they crossed the millionaire
mark in the first place.
If you’re a young investor, you
can learn a lot from the
investing behavior of 401(k) and
TSP millionaires. They keep
investing despite stock market
turmoil, according to Mike
Shamrell, vice president for
Thought Leadership for Fidelity.
The average 401(k) millionaire
has been investing for 26 years.
“These folks have seen a lot,”
Shamrell said. “They’ve seen a
lot of different market
conditions. They’ve seen a lot of
different economic swings. So I
think they’re a good group that
would definitely understand the
value of staying the course and
taking a long-term view.For an increasing
number of
employees, it has
been like
achieving
titanium status in
a loyalty
program. They
had joined an
elite group of
workers who had
more than a
million dollars in their
workplace retirement plans.
The number of 401(k)
millionaires in the fourth
quarter of 2021 jumped
32 percent compared with a
year earlier, according to
Fidelity Investments, one of the
largest managers of workplace
plans.
But high inflation has caused
consumer prices to spike, while
the war in Ukraine and supply
chain issues have rattled the
stock market. The resulting
economic mayhem has pushed
thousands of 401(k)
participants out of the
millionaire’s club.
The federal government’s
version of a 401(k), the Thrift
Savings Plan (TSP), also saw a
decline in the number of
retirement plan millionaires.
In its most recent quarterly
retirement analysis, Fidelity
reported that its number of
401(k) millionaires in the first
quarter of 2022 fell to 406,0 00
from 442,000 in the previous
quarter, a drop of 8 percent. The
decline ended a record increase
in the number of newly minted
millionaires.
Fidelity reported that the
number of individual retirement
account (IRA) millionaires also
dropped by nearly 8 percent.
The number of TSP millionaires
as of March 31 decreased by
11 percent to 100,360 from the
previous quarter, according to
the Federal Retirement Thrift
Investment Board.
Market fluctuations naturally
have an impact on account
balances, but it can be
psychologically harder dropping
out of the millionaire’s club. It’s
a milestone that can signal that
you have enough to retire
comfortably. It’s a rarefied world
when you consider so many
Americans don’t even have
access to a workplace
retirement plan.
Average retirement account
balances decreased in the first
quarter of this year. The average
401(k) balance dropped to
$121,700 in the first quarter,
down 7 percent from the fourth
quarter of 2021, and 2 percent
from a year ago.
The number of 401(k)
millionaires in the plans that
Fidelity manages is a relatively
small segment, just shy of
2 percent out of 20.7 million
accounts, but the ability to grow
their wealth in a workplace plan
shows you don’t have to chase
risky cryptocurrency investment
opportunities.Stormy markets thin t he 401(k) millionaire’s clubMichelle
Singletary
THE COLOR
OF MONEYISTOCK
The number of 401(k) millionaires fell in the first quarter this year,
according to Fidelity Investments, amid the volatile stock market.warmth is a bonus; friendliness,
if you can muster it, is gold
plating.
Spend your trust wisely,
especially when you’re new.
Some colleagues are super nice,
right up until they aren’t. Some
are great confidants, until they
aren’t. Some invite you to hitch
your star to their wagon, and
then the wheels come off.
Although socializing in-person
is harder than in the Before
Times, texts and IMs make it
easy to bond with colleagues
through articles, memes and
jokes that take only a moment to
send and enjoy — or wreck your
reputation. If you have to ask, “Is
this okay to send?” — it’s not.Being informed
You know the next best thing
to being knowledgeable? Being
curious. The hack for looking
smarter? Ask questions and seek
opinions.
And what if you’re genuinely,
objectively knowledgeable and
smart? Just remember that
progress humbles every one of us
over time.
In the late 1990s, I was kindly,
patiently coaxing senior
colleagues off text-based DOS
terminals and onto graphics-
based Windows operating
systems, wondering why they
were resisting change that would
make their jobs easier. Now I’m
often having my hand held
(figuratively) by colleagues half
my age (literally) as they kindly,
patiently help me abandon the
familiar and functional for the
sleek and smart.Extra credit: Virtual meetings
E ven if you don’t have a Room
Rater-worthy home office, you
probably know all about video
meeting etiquette from the past
couple of years. But humor me:
l Even if you just rolled out of
bed or are in from the gym, you
shouldn’t look it.
l No picking, clipping,
grooming or chewing while the
camera is on.
l Protect your bubble. The
occasional disruption will be
forgiven, but few have patience
for unlimited barking no matter
how adorable the source.
l In the minutes before a
meeting starts, check your
posture and background to make
sure the image you’re projecting
matches the one you want people
to have of you.
The workplace you’re entering
is not your parents’ workplace,
and success takes many forms.
But there are still some
principles you can hold fast to:
Respect people’s time, offer your
best, and try to be the kind of
colleague who makes the work
experience more pleasant.
[email protected]I’m hard-put to
advise today’s
graduates on how
to succeed in the
workplace. After
two years of
navigating virtual
schooling, they
know how to
connect, adapt
and endure. Many
of them cut their
teeth on the concepts of mental
health, social awareness and
emotional intelligence, so they’re
naturally inclined to seek out
balance and equity in their
personal and professional lives.
The typical advice aimed at
helping them succeed in the
workplace — show up early, stay
late, dress well, make
connections at the water cooler
— falls flat in the era of remote
workplaces.
And they’re entering the most
employee-favorable job market
in decades. Job candidates are
telling employers what they’re
looking for, and smart employers
are listening like never before.
It’s a powerful position to be in.
But you know the adage about
great power and responsibility. If
you tell employers what you need
to succeed, they need to see you
succeeding. You’re right to
demand that your work and time
be valued, but you also have to
show the value you’re providing.
Here are timeless tips on how to
do that.
Work ethic
Whether you’re hired into an
on-site, remote or hybrid
workplace, being strategically
present tops being always
present, but developing that
strategy may take a while.
At the office or on Zoom, be no
later than on time, especially for
online meetings when the clock
is right in front of everyone’s
face.
You probably have more
reserves of time and energy now
than you will in later years. Be as
generous with them as you can to
those who need and appreciate
it.
When you need to ask for help
on a work task, be ready to show
how you tried to figure it out
yourself first.
Dressing for the role
Learn your employer’s dress
code, then err on the
conservative side until you’re
sure it’s safe to relax your
standards.
Office fashion splurge:
comfortable, supportive dress
shoes.
Remote fashion splurge: full-
spectrum adjustable ring light.
Work friends
Politeness is the minimum;To the class of 2022: It’s
a great job market, so
embrace your w ork ethic
Work
Advice
KARLA L.
MILLER
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T NEWS
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unique needs, wherever they are in life. Give us a call at 800.399.5919
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