DAN RATHER: In CBS' Eye on America tonight, it's pointed out that it's not just the rich who are getting richer on Wall Street; many rank-and-file American workers are making extraordinary profits through their 401(k) retirement plans. CBS NEWS Economics Correspondent Ray Brady reports on the new American millionaires.
JACK VIVONETTO: You want me to get you started?
RAY BRADY: He's your typical boomer: married, 45 years old, with a young daughter, worried about paying her college tuition and financing his own retirement. So Jack Vivonetto, like many boomers, is plowing as many dollars as he can into his company's 401(k) plan.
VIVONETTO: I'd say we're all in the same boat; they're saving like there's no tomorrow.
BRADY: Even though Vivonetto has only had a 401(k) plan for four years, it's growing quickly and he's optimistic it's going to pay off big, as big as 401(k)s are starting to pay off for thousands of Americans.
A survey by T. Rowe Price, the giant mutual fund group, found that at the end of 1995, of the 700,000 Americans who had retirement money with the firm, 120 had become millionaires. Now, 18 months later, 870,000 have accounts, but the number of millionaires has nearly tripled.
MELISSA: Hello, this is Melissa. Can I help you?
BRADY: At The Scarborough Group in Annapolis, Maryland, financial planner David Evans says of the 5,000 401(k) plans he oversees, four to seven a year hit the million mark.
How many millionaires do you feel there are from 401(k) plans in the country right now?
DAVID EVANS (Scarborough Group financial planner): I think that right now in the United States there's probably about seven hundred to seven hundred fifty thousand millionaires in 401(k) plans.
BRADY: And Evans says if the average 35-year-old worker puts 10 percent of his salary every year into a 401(k)...
EVANS: Then that person will have $1 million by the time they hit 60 in their 401(k) plan.
BRADY: It's no secret, of course, what has turned many of today's wage earners into millionaires: Wall Street's big-ball market's been on a real rampage, the Dow Jones industrial average alone doubling from 4,000 to 8,000 in just the last two and a half years.
And most of the new millionaires, many of them people who thought they'd never have a million, put their retirement money into stocks and mutual funds. Take Kentucky psychologist Marilyn Mayer.
MARILYN MAYER (psychologist): Does she know about it?
BRADY: Ask her reaction when she was told her 401(k) had passed the magic million-dollar mark.
MAYER: And then I started looking at it, and I started counting zeros, and I said, "Oh, my God, you're right. This has hit a million dollars." I was totally astonished. I'm still in shock.
BRADY: And ask her companion, Betty Walker, who shares her 401(k), what a million in a 401(k) means.
BETTY WALKER: A sense of having some power, not over people or things, but over my on life. That's the best of it.
WALKER: Yep, just what you said at the beginning: freedom.
BRADY: Many of the 401(k) millionaires made their money in the stock market. But with the market in record-high territory, some financial planners are saying this may be the time for 401(k) holders to play it just a bit safer.
In New York, I'm Ray Brady for Eye on America.