How do people have massive retirement accounts if it's a $19,500 (or whatever) limit per year?

[Anonymous]

Anonymous wrote:My DHs retirement account is bananas because his company matches 100% of the employee contributions. My company only gives 3% of the employees salary (automatically). We are in our mid-30s and both max out our contributions. His account is... double mine.

My former employer matched up to 13 percent, so that was how I was able to build up a decent amount. My current company is just 3-4 percent like yours.

[Anonymous]

I have a side hustle so I have a SEP IRA on top of my employer 401K.

[Anonymous]

Good friend's IRA is 8 figures because he self-directed a portion for angel investing and one of the companies went public.

[Anonymous]

No idea. I’m 33 and have $80k in my 401k. I don’t have a large employer match and couldn’t afford to live in DC and max out earlier in my career. I am making up for lost time now that I have a healthier income and I should be okay.

I know that my $80k balance alone is better than most Americans will ever do, though, so I’m choosing to focus on the positive.

[Anonymous]

Anonymous wrote:I have never been able to max (teacher) and only have $350k at age 45. I am a bit jealous of all these company matches. This year I am finally in a position to max my 403b and 457b. That along with my pension paying $5k a month should have my wife and I pretty well set though. I put 7.5% of salary into the pension. Basically teachers pay 75% of the typical pension benefits. States pay about 25% on average for the typical state pension.

Oh please..a public school teacher complaining? You are a bit jealous of all these company matches..with a pension paying $5k a month, really?

Being saving for almost 43 years- maxed out 401k, IRA about $2M now..I can NOT get $5k/mo off my savings!
Wife was a Catholic school teacher- had no connections to get a public school job- her pension? $5k PER YEAR! NOT Guaranteed, NO COL.

Teachers' pensions, created ridiculous property taxes for NJ & other Dem states- We paid over $15k/yr for an avg 3 bedroom house- which is why retired people can't afford to stay there.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Longest bull market in American history supercharged by ridiculously low interest rates. Check back on everyone's "massive retirement accounts" in two years when the market is down 75%.

This doomsday attitude explains why this poster is so far behind so many of us in retirement savings.

I'm 60 and have been retired for 7 years. I invested the bulk of my retirement savings in index funds from the very beginning -- the mid 80s -- and still am. In the last 50 years, the Dow has finished the year down 14 times and up 36 times. It's never come close to dropped 75 percent; the biggest drop in the last 50 years (34 percent in 2008) was less than half that, and with one other exception (1974) it's never finished a year lower than 20 percent ahead.

In contrast, it's finished up more than 20 percent 14 times.

If you're patient and smart and invest with a long haul attitude, and don't allow yourself to get crippled by this poster's thinking, there is no surer way to a healthy retirement than investing in the market.

This is right. TO add further context, after the big drop in 2008, it recovered 18% the next year, and 35% over the next three years.

From 2000-2002, the market dropped about 30%, but in 2003 it gained 25%.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I have never been able to max (teacher) and only have $350k at age 45. I am a bit jealous of all these company matches. This year I am finally in a position to max my 403b and 457b. That along with my pension paying $5k a month should have my wife and I pretty well set though. I put 7.5% of salary into the pension. Basically teachers pay 75% of the typical pension benefits. States pay about 25% on average for the typical state pension.

Oh please..a public school teacher complaining? You are a bit jealous of all these company matches..with a pension paying $5k a month, really?

Being saving for almost 43 years- maxed out 401k, IRA about $2M now..I can NOT get $5k/mo off my savings!
Wife was a Catholic school teacher- had no connections to get a public school job- her pension? $5k PER YEAR! NOT Guaranteed, NO COL.

Teachers' pensions, created ridiculous property taxes for NJ & other Dem states- We paid over $15k/yr for an avg 3 bedroom house- which is why retired people can't afford to stay there.

Why do you say that you can't get to $5,000/month with a $2 million portfolio? If you use the 3% rule, you get a $60,000/year withdrawal, which works out to $5,000/month.

[Anonymous]

My college roommate had been saving for retirement in an IRA from her first job at 15.

[Anonymous]

As others have said, sep ira

[Anonymous]

I'm a business owner that can match up to 25% of my income into the account so last year that could have been $19,500 plus another 50K.

[Anonymous]

DH's employer has a mandatory saving plan for the employee. You don't even see that amount in your paycheck (its a %age). The employer matches with double that amount. So you put in $5 and the employer puts in $10. Then there is all kinds of other retirement benefits and matches etc from the company. You can independently have other investments and savings outside of work. We save around 50%/. We are strictly LBYM people, but we live well on around $150K. No student debt, no private schools, low mortgage, no childcare cost, 1 SAH parent who left the workplace after banking every cent earned while working. Not a bazillion dollars, but we are comfortable enough.

[Anonymous]

Anonymous wrote:I feel like I'm not grasping the basics here... From my read, assuming you don't have your own business and are just an employee, and make enough savings to max out your retirement account, we can only give $19,500 a year, right? Plus $6,000 to Roth.

So how do people end up with these gagillion dollar retirement accounts? Did they start saving from age 20? Is there a way to give more than $19,500 plus $6,000 if you have the income/savings to do so?

My company has a generous match and thry also offer a mega roth.

My annual contribution looks like this:

19,500 Me
13,000 match
25,000 mega roth

Total: $57,500 annual retirement savings.

This does not include my husband.

And we've been maxing since age 23 (we met in college and moved in together then).

[Anonymous]

Anonymous wrote:My college roommate had been saving for retirement in an IRA from her first job at 15.

Yup. My son has been mowing lawns since age 14. He reports that income. We give him the max roth contribution each year. He is growing up knowing these things. This will help him tremendously.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I feel like I'm not grasping the basics here... From my read, assuming you don't have your own business and are just an employee, and make enough savings to max out your retirement account, we can only give $19,500 a year, right? Plus $6,000 to Roth.

So how do people end up with these gagillion dollar retirement accounts? Did they start saving from age 20? Is there a way to give more than $19,500 plus $6,000 if you have the income/savings to do so?

Employer match. Compounding investments. My 401(k), which I started contributing to in 1991, is worth $1.8 million now. I have maxed probably 26 of the 30 years, and even when the max was like $7,500, the time value of money takes over.

This sounds really really low for 30 years, especially for someone with an employer match. I've been maxing shorter than you and have a slightly higher balance.

[Anonymous]

Sock away the max for 20+ years and you do the math, Op!