The secret to a million dollar retirement account is not picking the right stocks or timing the market. The secret is have a disciplined savings strategy and a risk adjusted globally diversified portfolio. Most people are emotional about their investments and should rely on professionals to make their investment decisions. It also helps to believe in free markets and that markets are efficient, although not perfect. You cannot make up for a lack of saving by speculating.

That figure, based on data from the Employee Benefit Research Institute, may depress those with sums closer to the median 401(k) balance of roughly $60,000 — and for good reason. Even among employees 55 and up who’ve been contributing to the same 401(k) plan for more than 20 years, just 2% are estimated to have cracked the $1 million mark, says Jack VanDerhei, EBRI’s research director.

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To some, the other 98% show that the 401(k), the principal vehicle for American retirement savings, is at best inadequate, and at worst, a colossal failure. Even Ted Benna, the man credited with developing the first 401(k) plans out of an IRS tax loophole in 1981, now concedes that they’ve grown overly complex, with too many options, too high fees, and too many ways to cash out one’s nest egg.

Even some 401(k) providers don’t disagree. With traditional pensions, employers hired teams of experts to make the kind of tough investing decisions now entrusted to individual employees, says Catherine Golladay, vice president of participant services for Charles Schwab. “Left to their own devices, most people do not have the knowledge or the discipline to do this themselves,” she says.

The real secret to a $1 million dollar 401(k) balance is disciplined saving and a disciplined investment process. Plan participants cannot make up for a lack of either by speculating with their retirement funds.

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