How to Double Your Money in 10 Years

Committed investors can grow their nest eggs using a very simple formula.


Fidelity Investments released data last week showing that it’s not too late for investors over age 55 to double their retirement savings. These committed investors grew their nest eggs using a very simple formula: They saved a significant portion of their salary each year.

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The average account balance for workers age 55 and older who continuously saved in their 401(k) with a single employer for the entire decade saw their account balance more than double from $96,000 ten years ago to $211,300 by the end of the third quarter of this year. New contributions accounted for the majority of the account growth, according to the Fidelity analysis of approximately 17,000 401(k) plans with 11 million participants.

The 401(k) account balance growth was particularly dramatic for people saving 8 percent of their pay or more. Employees with a contribution rate at or above 8 percent of pay this year showed average balances increasing more than 130 percent over the past 10 years from $125,600 to $291,700.

[See How to Tell if You Have a Good 401(k) Plan.]

“The past decade was certainly not a lost decade for participants who remained committed to saving even through all of the market’s ups and downs,” says James MacDonald, president of workplace investing for Fidelity Investments. “A disciplined, systematic savings approach in a diversified portfolio has been the key to building a sizable nest egg for many pre-retirees during one of the most volatile decades in history.”

[See 10 Ways to Ruin Your Retirement.]

Of course, people unable to save 8 percent of pay, who didn’t save continuously, or who lost or changed their jobs during that time period have seen much less growth. When all retirement savers were included in the analysis the average 401(k) account balance grew just 23 percent from $55,000 at the end of 2000 to $67,600 in the most recent quarter, due to both market returns and an average saving rate of 8.2 percent of earnings in the most recent quarter. The typical account balance is still below the $69,200 the average Fidelity 401(k) held in 2007.