How Long It Takes To Become a Millionaire by Using Your 401(k)

According to a recent analysis by Fidelity, the number of 401(k)-plan billionaires reached 544,000 out of just 24 million plan participants. This is a gain of 9.5% from the previous quarter, suggesting that long-term investors have been riding the stock market highs to millionaire status.

But what exactly does it take to become a 401(k) millionaire, and is it attainable for us normal folks? Let’s lay down the arithmetic behind building up a $1 million 401(k) balance—and how long it might take.

401(k) Investing Limits

Before we get into the math of depositing $1 million into your 401(k) account, it’s vital to consider the investing limits of the account itself.

As of 2025, the IRS limits you to $23,500 in contributions to your employer’s 401(k) plan. This means you can defer roughly $2,000 per month into your 401(k) account—and receive a tax deduction at the same time.

401(k) Employer Match

Your employer can also match such payments—up to 25% of your entire compensation for the year. So, if you make $100,000, your employer can add an additional $25,000 to your 401(k) plan.

Most employers match a smaller amount, say, 50% of your contributions up to 6% of your salary. So, you’d put in $6,000, and they would put in $3,000.

Employer matching amounts don’t count toward your $23,500 total for the year.

How Much You Need to Invest to Become a 401(k) Millionaire

Now that you know the contribution restrictions, we can determine how much you need to invest to become a 401(k) millionaire.

Here are some assumptions to make our calculation:

• Investing in a target date fund, largely invested in stock market index funds
• Average 7% returns each year
• You can invest up to the maximum $23,500 per year, plus receive a $3,000 employer match (a total of $26,500 invested).

Here’s how your 401(k) account could grow over time, via Investor.gov’s Compound Interest Calculator:

In this scenario, you’d need to contribute $23,500 every year for 20 years in Years401(k) account and earn a $3,000 match to hit the $1 million barrier.

How To Invest Less and Still Have a $1 Million 401(k) Account at Retirement

While it would take 20 years to attain $1 million in your 401(k) account while contributing over $2,000 per month, this might be too much for certain investors.

But don’t lose hope: You can still retire with a $1 million 401(k) account if you simply give it more time to grow.

Compound interest works best over longer periods of time, so here’s a situation where you can invest just $500 each month and still retire a millionaire.

Using the same 7% return assumption from the last example, here’s how long it takes to get to $1 million in your 401(k) account investing only $500 per month. Figures are from the Compound Interest Calculator:

In this scenario, if you put just $500 per month into your 401(k) account, it will take roughly 38 years to become a 401(k) millionaire.

Better Returns Means 401(k) Millionaire Faster

long it can take a long for your money to grow to $1 million or more, earning superior investment returns can speed up the process. Of course, there’s no assurance with investment returns, and past performance does not guarantee future results.

But here’s how varying rates of return can effect your trip to billionaire status in your 401(k) account.

If you’re investing $500 per month into your 401(k) account, here’s how long it takes to become a millionaire based on your average rate of return, per the Compound Interest Calculator.

• 5% average return = 46 years
• 6% average return = 42 years
• 7% average return = 38 years
• 8% average return = 35 years
• 9% average return = 33 years
• 10% average return = 31 years

As you can see, adopting the correct investment asset mix for higher long-term returns can have a big impact on how long it takes to attain $1 million in your 401(k) account.

Conclusion

The number of 401(k) millionaires is on the rise. But this is only feasible thanks to persistent investing over a long period of time.

You, too, can attain the $1 million mark in your 401(k) account by investing each and every paycheck for decades on end. But it’s crucial to understand what you’re investing in, the sorts of investments available, the average projected returns, and your employer match.

If this is all a bit daunting, consulting with a professional financial advisor can help you design a plan to maximize your 401(k) savings for retirement.

To compete your way to 1 million dollar check this out:

How To Millionaire: Decoding Financial Freedom--The Unexpected Science of Mindset, Motivation, and Success (The Wealthy Alley Cat Publications