It's a question advisors should be asking as they eye the kind of impressive portfolio growth brokerages south of the border are now crowing about.
New statistics from Fidelity in the U.S. suggests the number of 401(k) millionaires is rocketing into orbit. In the past two years alone, Fidelity says the number of retirement accounts with million-dollar balances or more has doubled to 72,379.
director Meghan Murphy says of the growth, “These are people who have been saving likely since the advent of the 401(k) in the late 1980s. The power of compounding interest is your friend.”
What’s happening here in Canada? Why aren’t we reading about the number of millionaire RRSP accounts? Clients need to hear the success stories. Firms across the country should be spreading the good news.
Clearly the bull-run of the past six years has helped those people who’ve continued to plow savings into their retirment accounts at time when the markets have been on a tear. A rising tide lifts all boats.
Interestingly, in the Fidelity experience, the number of millionaire accounts hit a low of 13,404 in 2008 in the depth of the financial crisis. Over the past six years the number of millionaire accounts at Fidelity has grown 32% on an annualized basis — a pretty impressive growth rate.
So much is written in the media about a lack of retirement readiness
and yet Fidelity’s statistics show there’s a significant number of 60-year-olds (the average age of the millionaire account holder) on track for a comfortable retirement.
A 2013 survey by the Bank of Montreal found less than 1 percent of the respondents had an RRSP of $1 million or more with the average RRSP less than $100,000. Statistics Canada pegs the number of RRSP contributors at 5.95 million as of 2012, which translates into almost 60,000 million-dollar balances using the 1 percent figure from above.
There’s good news out there.
Advisors, let’s hear some noise.