Retirement Retirement Planning

6 Secrets of People Who Quietly Became 401(k) Millionaires

These habits have helped ordinary people build exceptional 7-figure wealth.

By Catherine Collins

Edited by Laura Hohenstein

Updated Dec. 19, 2025

Becoming a 401(k) millionaire might sound like something reserved for high earners or trust fund babies, but the truth is that there is a growing number of regular people who have quietly become 401(k) millionaires. Surprisingly, their success is not really about earning a high income. Retiring comfortably is the result of several habits, behaviors, and long-term consistency as investors in the market.

According to the Bureau of Labor Statistics, 72% of private industry workers have access to retirement benefits. But not all of them take advantage of investing or the benefits of an employer match. That, plus delaying investing or panic selling has left many people short of their retirement goals.

The good news is that it's never too late. If you're interested in becoming a 401(k) millionaire and joining the ranks of workers who are quietly building wealth over time, here are some of the secrets of the people who have made it there.

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They started early

The most significant factor in becoming a 401(k) millionaire is to start investing as early as possible. Due to the wonders of compound interest, those who start investing consistently in their 20s reap the biggest rewards when it comes to maximizing retirement returns.

That's because with compound interest, you earn interest on your interest. So, someone who starts investing in their 20s can actually contribute less overall to their retirement accounts than someone who starts in their 40s and still end up with a higher 401(k) balance at retirement age.

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They maximized an employer match

According to Vanguard's 2025 How America Saves Report, 96% of employers offer some type of contribution to their employees' retirement plans, whether it's a matching contribution or a non-matching contribution.

However, many employees don't take advantage of employer matches, either because they don't understand the process or because they feel they need their entire paycheck for living expenses. However, 401(k) matches are an important component of building wealth, and taking advantage of them is a crucial first step toward becoming a 401(k) millionaire.

They kept costs low

In addition to starting early and taking advantage of employer matches, choosing the right investments is essential. Many 401(k) millionaires focus on buying low-cost mutual funds.

They pick funds with low expense ratios, so more of their money stays in their 401(k)s and less goes toward fees and the companies managing the accounts. Many people don't realize just how much of their retirement contributions go towards fees and plan expenses, and doing an annual review of your plan's costs can help optimize your account.

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They avoided emotional decisions

It's easy to get spooked as an investor during market fluctuations, economic downturns, and persistent news headlines about inflation.

However, those who become 401(k) millionaires steadily invest throughout their working lives, regardless of market returns or external factors. They're more focused on long-term gains, rather than short-term dips.

They don't make early withdrawals

According to a Transamerica Retirement Survey, 37% of employed workers withdrew money from their retirement accounts early. While a percentage of those were taking a 401(k) loan, 21% took an early or hardship withdrawal.

Withdrawing money early not only reduces potential investment gains, but it can also come with penalties and fees. It's common for 401(k) millionaires to keep a robust emergency fund on hand to cover financial emergencies and prevent having to withdraw from retirement accounts early.

They gradually increased their contribution percentage

It's common for 401(k) millionaires to increase their contribution percentages every year. For example, if you start a $90,000-a-year job and contribute 5% to your 401(k), aim to contribute 6% the following year. Then, every time you get a raise, increase your contribution percentage right away.

Let's say you get a 3% raise to $92,700 and increase your retirement contributions by 1% for a total of 6%. You'll still enjoy a higher take-home income while also increasing your retirement contributions. Following this pattern every year that you work can help you to build a substantial nest egg without feeling like you're getting less take-home pay.

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Next steps to take

If you want to follow in the footsteps of 401(k) millionaires, here are some important next steps to take. First, enroll in a 401(k) plan if you haven't. Review your contributions and investments if you have. Then, choose low-cost investments, like index funds. Make sure you increase your contribution percentage each year, and regularly review your allocations. Finally, build an emergency fund on the side to avoid the temptation to take out a 401(k) loan or a hardship withdrawal.

Bottom line

Creating a $1 million+ portfolio is possible, even on an average income. Most people who achieve this goal started early, took advantage of employer matches, and steadily increased their contributions. Currently, only 9.1% of 401(k)s hold over $1 million, according to Empower data. However, average 401(k) balances have increased 5.7% since last year.

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