Millions of Americans believe building a multi-million-dollar retirement account is only possible for startup founders, Wall Street executives, or lottery winners. The latest IRS data tells a different story.

More Americans than ever are quietly accumulating enormous balances inside tax-advantaged retirement accounts, and many are doing it with strategies available to ordinary workers.

According to new data from the congressional Joint Committee on Taxation, nearly 12,000 Americans held Individual Retirement Accounts (IRAs) worth at least $10 million in 2024, up dramatically from just 3,625 accounts in 2019.

While most retirement savers still have less than $100,000 saved, financial experts say many workers are overlooking contribution strategies that could dramatically accelerate long-term wealth.

Why Tax-Advantaged Retirement Accounts Matter

The biggest advantage of retirement accounts isn’t necessarily higher returns.

It’s that your investments can compound without annual taxes eating into gains.

Whether you contribute to a traditional 401(k), Roth 401(k), or IRA, tax advantages allow your investments to grow far more efficiently over decades than a comparable taxable brokerage account.

For investors with 20, 30, or even 40 years before retirement, that tax shelter can translate into hundreds of thousands—or even millions—of additional dollars.

Step 1: Max Out Your 401(k) First

For 2026, workers can contribute up to:

$24,500 to a 401(k) or similar employer-sponsored retirement plan
$32,500 if you’re age 50 or older (including catch-up contributions)
$35,750 for workers ages 60 through 63 under enhanced catch-up rules

Many investors never reach these limits.

Instead of increasing lifestyle spending after receiving raises or bonuses, financial planners often recommend increasing retirement contributions first.

Over time, consistently maxing out a retirement account can have a dramatic impact on long-term wealth.

Traditional 401(k) contributions reduce today’s taxable income, while Roth contributions are made with after-tax dollars but generally allow tax-free withdrawals during retirement.

The right choice depends largely on your expected future tax bracket.

Step 2: Don’t Ignore Your IRA

In addition to a workplace retirement plan, many Americans can also contribute:

Up to $7,500 annually to an IRA
Up to $8,600 if age 50 or older

Traditional IRAs may offer tax deductions depending on income and workplace retirement coverage.

Roth IRAs provide tax-free growth and withdrawals but have income limits that prevent many higher earners from contributing directly.

Even if you exceed those limits, another strategy may still be available.

Step 3: The “Backdoor Roth” Strategy

Many higher-income investors use what’s known as a Backdoor Roth IRA.

Instead of contributing directly to a Roth IRA, investors:

Make a non-deductible contribution to a traditional IRA.
Convert those funds into a Roth IRA.
Pay taxes only on any investment gains generated before conversion.

Because Roth accounts grow tax-free, many investors view this strategy as one of the most valuable retirement planning tools available.

However, existing traditional IRA balances can create additional tax complications, making professional tax advice worthwhile before proceeding.

Step 4: The Little-Known Mega Backdoor Roth

One of the least understood retirement strategies is the Mega Backdoor Roth 401(k).

While most workers think the annual 401(k) contribution limit is $24,500, IRS rules actually allow much higher total contributions under certain employer plans.

For many workers, the overall annual limit reaches:

$72,000
$80,000 for many workers over age 50
$83,250 for certain workers ages 60 to 63

The strategy works by making additional after-tax contributions inside certain employer 401(k) plans before converting those dollars into a Roth account.

Once converted, future investment gains generally become tax-free.

Not every employer offers this feature, but it’s becoming increasingly common.

Many larger retirement plans now allow automatic Roth conversions after every paycheck, making the process significantly easier than in previous years.

What Consistent Investing Can Become

The power of compounding becomes remarkable over long periods.

According to New York University law professor Daniel Hemel, someone who contributed the equivalent of today’s maximum allowable 401(k) amount every year beginning in the mid-1980s—and earned returns similar to the S&P 500—could have accumulated more than $20 million by the end of 2024.

While few investors can consistently contribute the maximum every year, the example highlights how disciplined saving combined with decades of compounding can produce extraordinary results.

Step 5: Business Owners Have Another Powerful Option

Owners of small businesses, medical practices, law firms, and professional partnerships may qualify for another retirement vehicle: cash balance pension plans.

Unlike traditional 401(k)s, these plans allow significantly larger annual contributions.

In some cases, older business owners can contribute nearly $400,000 annually, depending on age, income, and plan design.

Cash balance plans have become increasingly popular over the past two decades because they allow high earners to defer substantial amounts of taxable income while accelerating retirement savings.

When participants retire, these balances are often rolled into IRAs, helping explain how some retirement accounts eventually grow into the multi-million-dollar range.

The Biggest Retirement Mistake Isn’t Investment Selection

Many investors spend years searching for the perfect stock.

Financial planners often argue they’re asking the wrong question.

Increasing annual contributions, maximizing employer matching programs, taking advantage of Roth conversion opportunities, and allowing decades of uninterrupted compounding frequently have a greater impact on retirement wealth than attempting to consistently outperform the market.

While market returns will always fluctuate, the amount you save—and how tax-efficiently you save it—remains one of the few variables fully within your control.

What Investors Should Watch

Retirement contribution limits generally increase over time with inflation, creating new opportunities for savers each year.

As employers expand access to Roth features, automatic conversions, and after-tax contribution options, more workers may gain access to strategies that were once available primarily to executives and business owners.

For long-term investors, maximizing every available tax-advantaged account could prove to be one of the most effective wealth-building decisions they’ll ever make.