The rise of 401(k) millionaires points out an obvious but powerful truth for all investors: Many people didn't beat the market; they essentially owned it.

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New data from Fidelity Investments, cited by Yahoo! Finance, revealed that the number of 401(k) millionaires rose to a record high of 665,000 at the end of 2025, with the average account balance increasing by 11% to $146,100. These increases came despite the volatility that occurred in the markets this year.

The markets have rewarded investors with strong gains in 2025. The S&P 500 was up almost 17%, the Nasdaq Composite was up more than 20%, and the Russell 2000 was up about 13%.

For long-term savers, the key to their account balance was not just the performance of the markets but the contributions that they made. In the latest data from Fidelity, workers have an average savings rate of 14.2%, including employer contributions. In addition, nearly 40% of the employees increased their savings rate this year.

Where ETFs Fit Into The Equation

Although the majority of 401(k) plans rely on mutual funds or target-date funds rather than ETFs directly, ETFs can offer a similar path for investors building retirement portfolios in other accounts, such as IRAs or brokerage accounts.

Low-cost index ETFs, for example, allow investors to track the same market benchmarks that drive much of the long-term growth seen in retirement portfolios.

Some of the most popular ETFs that track the broad market exposure that can often be found in the majority of 401(k)s include the Vanguard Total Stock Market ETF (NYSE:VTI) or the SPDR S&P 500 ETF Trust (NYSE:SPY), both of which provide exposure to the U.S. stock market.

Fixed income is also an essential element of the investment mix as an individual approaches retirement. Bond ETFs, such as the iShares Core U.S. Aggregate Bond ETF (NYSE:AGG), are often used for stability in the face of market volatility, helping to reduce the risk for the investor as he or she approaches retirement.

In fact, data from Fidelity has revealed that fewer than 7% of retirement savings account holders have a 100% equity allocation.

Consistency Remains The Key

According to Fidelity's data, the average retirement savings rate reached 14.2% when employer matches are included, while nearly 40% of workers increased their contribution rates during the year.

That discipline, combined with long-term exposure to the market, is often what drives retirement wealth over time.

For investors looking to replicate similar strategies outside employer-sponsored plans, diversified ETFs tracking major stock and bond indexes can offer a simple, low-cost way to stay invested and benefit from long-term market growth.