The fourth quarter of 2023 saw a 20% surge in the number of 401(k) millionaires from the previous quarter, a rebound from Q3’s dip, due in part to strong market dynamics, according to Fidelity Investments’ full year 2023 retirement analysis.

The total number of retirement savers in Fidelity 401(k) plans with balances reaching seven figures reached 422,000 on December 31, 2023, a significant rise from the total of about 349,000 millionaires at the close of Q3 2023. The number is close to the record high of 442,000 millionaires at year-end 2021.

Meanwhile, the trend of individual retirement account millionaires at Fidelity has mirrored that of 401(k) millionaires. The number dipped to 338,725 in Q3 2023 and has grown back to 391,562 in Q4 2023, a 15.6% increase.

Fidelity’s analysis, which considers 22.7 million participants, revealed a positive outlook for retirement savers as the year concluded. Improved market conditions, coupled with consistent contributions, pushed average account balances to their highest levels in nearly two years. Notably, 37% of workers increased their retirement savings contribution rates throughout 2023.

“This past year ended on a high note for retirement savers,” said Sharon Brovelli, president of workplace investing at Fidelity Investments, in a statement. “When it comes to matters like market stability and economic events, 2023 gave us the highs of the highs, and the lows of the lows, but encouragingly, many retirement savers took the long view and stayed the course through it all, which is the type of commitment that can lead to a secure financial future.”

Fidelity’s report highlighted that the combined savings rates for 401(k) plans, including both employee and employer contributions, remained steady at 13.9%. This was sustained from Q2 and Q3 2023, with a marginal increase from the previous year’s 13.7%. By year-end 2023, 78% of 401(k) savers contributed at a rate sufficient to secure the full matching contribution offered by their employer.

The average retirement account balances of IRAs increased by 6% from Q3 2023 to $116,600. At the same time, average 401(k) balances grew by 10% to $118,600 and average 403(b) account balances grew by 9% to $106,100.

With the SECURE 2.0 Act of 2022, the required minimum distributions amount was increased from age 72 to 73 in 2023. Retirees younger than 70 have mostly refrained from making 401(k) withdrawals. A fifth of retirees aged 70 to 72 withdrew from their 401(k) plans in 2023, in contrast to the 94% withdrawal rate among retirees aged 73 and above, according to Fidelity.

Plan designs are also evolving, according to Fidelity’s analysis of 23,500 corporate defined contribution plans.

The firm found that more plan sponsors are offering workplace managed accounts, up to 42.1% in Q4 2023, as compared with 37.7% in Q4 2021. Plans are also including Roth options at a higher rate, with 90.4% of employers offering a Roth option as compared to 76.4% in Q4 2021.