More 401(k) millionaires were made amid the pandemic

Staying the course pays off. This is a basic truth of investing. Every time there is a stock market crash, there are self-created losers. Long-term investors see downturns as an opportunity.

The general assumption is that Americans are struggling during the pandemic. That’s certainly true; those who lost their jobs, or had their income reduced must be struggling. But those facts are not reflective of the entire population.

More than 220,000 workers crossed the $1 million mark in their 401(k)s in the second quarter of 2020, according to Fidelity Investments. And as of the third quarter of 2020, there were at least 262,000 Fidelity 401(k) customers with $1 million or more in their retirement accounts.

This came amid a pandemic-induced market crash in March, when the S&P 500 index plunged 7%. Since then the index climbed 38% from close of March 9, 2020, to Jan. 7, 2021. For savers with 401(k)s approaching retirement, watching their portfolio dwindle is anguish, but those who kept contributing reaped the rewards. “When the market tanked in March, and I know my heart just dropped too, they stayed steady and didn’t make any changes,”

Washington Post syndicated personal finance columnist Michelle Singletary told Yahoo Finance. They “saw those losses come back and then some. They aren’t panicked by everyday gyrations of the market. They have a plan. They stick to it. They don’t panic. And so those are the reasons why they’ve been able to become a millionaire during a time when the economy is really rough for a lot of people.”

Source: More 401(k) millionaires were made amid the pandemic