4 Lessons from the Rise of Female 401(k) Millionaires

Women everywhere are fighting against inequality in their personal lives, professional lives and online lives with the hashtag #timesup. Their retirement savings are strengthening as well. The number of 401(k) millionaires hit a new record high of 150,000 at the end of 2017, according to Fidelity. And the female share of that increasing number is growing, too: from 10 percent in 2005 to 21 percent in 2017 -- still a minority, but a vast improvement.

Of course, saving a million bucks isn't what it used to be. And picking an arbitrary number -- even if it is seven figures -- isn't the best way to approach any financial goal. "Saying, 'I want $1 million for retirement' is akin to my saying, 'If I work out three days per week, I'll be physically fit,'" says certified financial planner Taylor Schulte, founder of San Diego financial planning firm Define Financial. "Maybe $1 million is enough, maybe not. Maybe three days in the gym is enough, maybe not. It depends on the specifics of your end goal."

Fidelity recommends that people strive to save 10 times their final salary for retirement, with the idea that basing your target number on your own salary will help align the goal with your current living costs. Still, you may opt to live more luxuriously or more frugally in your retirement years. Considering exactly how you want to spend your retirement is necessary to calculate an accurate savings goal for yourself. "While reaching $1 million in your 401(k) is a great milestone, it's important for many people, especially younger investors, to remember that you may need more than that to live the lifestyle you want in retirement," says Jeanne Thompson, head of workplace solutions at Fidelity Investments.

But let's not discount $1 million: Amassing such a sum is an accomplishment (regardless of whether it's enough for you to retire comfortably). So how are so many people, and specifically women, able to reach that milestone?

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Start early. First, you have to dive in and get started. Part of why women may have lagged men in building wealth is simply because, in the past, they were not expected to and were not given many opportunities to do so. But that time is up. Women workers in the U.S. are 74.6 million strong, making up nearly 47 percent of the labor force, according to the Department of Labor. And many of those working women are diverting their growing incomes toward retirement savings. "We've definitely seen an increasing number of women participating in their 401(k) plans at work," Thompson says. "And we're also seeing women contribute more to their 401(k) accounts."

Contributing more is great. On average, Fidelity's 401(k) millionaires contribute 14.9 percent to those accounts. But when you start investing, even if it's just a little bit at first, can actually be more important than how much you invest. For example, if you start investing $100 a month at age 25, assuming an average 8 percent return a year, you'd have about $18,500 after 10 years, according to calculations made using Bankrate's compound savings calculator. If you kept that money invested, without adding another cent to your account, you'd wind up with a little more than $200,000 by age 65. On the other hand, if you wait until age 45 to start investing $250 a month and earn the same 8 percent average annual return, you'd reach just about $148,000 -- or $52,000 less -- by age 65.

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Contribute regularly. Once you get started, you have to keep it up. The good news is that the first push is the hardest -- starting to save and invest early helps you develop good financial habits, which hopefully grow with you and your fortune. "None of these 401(k) millionaires reached that milestone overnight," Thompson says. "And most female 401(k) millionaires had been saving for retirement for many years, which underscores the importance of starting to save early."

Indeed, it takes time to build wealth. The average age of Fidelity's 401(k) millionaire is 59.4 years old. And women certainly know how to persist. "What we've seen for years is that women tend to be steady investors," says Sallie Krawcheck, founder of female-centric investing platform Ellevest. "At Ellevest, two-thirds of our clients have recurring deposits, so they make investing a habit."

Setting up automatic contributions is a smart way to ensure you save regularly. Even better, you can assign a percentage of your pay, instead of a set dollar amount, to go straight to your 401(k). That way, whenever you get a raise, you'll boost your retirement savings without even thinking about it.

Invest in stocks. In general, the long-running bull market has helped fatten many retirement accounts. Even despite recent volatility -- including drops in the Dow Jones industrial average of more 1,000 points for two consecutive days in early February -- stocks overall are still up over the past year and have historically marched upward over the long term. The one-year return for the Dow, as of mid March, is a robust 18.8 percent, according to investment research firm Morningstar. Over the past 15 years, the index has returned 8 percent a year, on average.

Of course, that climb for stocks has been anything but steady, and you have to steel yourself for some down days if you want to enjoy the ups. "Many of our female 401(k) millionaires are not afraid to invest in stocks," Thompson says. "One of the key characteristics of 401(k) millionaires is that they have a healthy percentage of stocks within their accounts -- so the stock market's performance has helped."

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Stick with your strategy. Even on those really down days, your best bet is to remain calm. In the long run, historically, the market has always bounced back, so maintaining a diversified portfolio and ignoring the day-to-day volatility inherent in stocks is a rewarding way to approach investing. It may be scary at times when the market is flashing red, but you have to be brave and carry on -- again, something women have proven able to do time and again.

"When the market wobbled recently, they did not panic, they did not log in and sell, they did not try to change their asset allocations," Krawcheck says of her Ellevest clients. "This steadiness -- investing during up and down markets and not trading emotionally -- has historically won out in the long term."

Stacy Rapacon is a North Jersey-based freelance writer, who covers personal finance, investing and careers. She began her work in service journalism as a reporter at Kiplinger's Personal Finance magazine in 2007. In 2010, she moved into the digital space to became an online editor for Kiplinger.com and most recently served as managing editor of the site's Wealth Creation Channel. In addition, her work has appeared on CNBC, Grow, Business Insider, Yahoo and other publications. You can find her on Twitter at @srapacon.