Super-savers in 401(k) - what are your retirement plans?

[Anonymous]

Probably (re-)stating the obvious, but ...

Not everyone has access to Mega-Backdoor Roth contribution options in through their employer retirement plans. So, just because there is a $61K hard upper limit, there may not be a way for an employee to reach that mark **within** their employer's plan ... regardless of salary.

Padding your brokerage accounts (outside of employer plans) has no upper limit.

...

It took me roughly 15 years to reach the $1M mark with my employer plan (401a + 403b) and Roth IRA. It took less than 5 years to then go from $1M to $2M. And then 18 months to go from $2M to $3M in July 2021. I peaked around $3.26M at Christmas.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:How can you be a super saver in a 401k? You can only put in $19,500. That makes for a nice retirement, but it's not 5m in the bank.

its amazing how many people on this board don't understand retirement plans and how they work. Combined contribution (employee + employer) maximums for 2022 are $61,000 (under 50) or $67,500 (over 50). Those limits easily allow for 5M in the bank. Take into account that some of that can be Roth / post tax, and it realizes you even more in retirement.

I agree. And you're one of them! Let's just run the numbers shall we?!?!

Let's say that OP is 47 years old and has been investing the absolute maximum employee contribution into a 401k for 25 years AND has been receiving the absolute maximum employer contribution for 25 years AND has been maxing out IRA contributions for 25 years. This is EXTREMLY difficult to do, BTW, since most employers come nowhere close to contributing the maximum amount. Let’s not also forget that 25 years ago the max employee, employer, and IRA contributions were $9,500.00, $20,500.00, and $2,000.00, respectively.

Let’s also assume that OP has been earning a very respectable 8% YoY return on all contributions over 25 years. The retirement savings contributions break down as follows:

A = Contribution Year
B = Max 401k Employee Contribution in Year A
C = Max 401k Employer Contribution in Year A
D = Max IRA Contribution in Year A
E = B + C + D in 2022 dollars after YoY compunding since Year A

A | B | C | D | E
1997 | $9,500.00 |$20,500.00 | $2,000.00 | $219,151.21
1998 | $10,000.00 | $20,000.00 | $2,000.00 | $202,917.78
1999 | $10,000.00 | $20,000.00 | $2,000.00 | $187,886.84
2000 | $10,500.00 | $19,500.00 | $2,000.00 | $173,969.29
2001 | $10,500.00 | $24,500.00 | $2,000.00 | $186,251.85
2002 | $11,000.00 | $29,000.00 | $3,000.00 | $200,421.16
2003 | $12,000.00 | $28,000.00 | $3,000.00 | $185,575.15
2004 | $13,000.00 | $28,000.00 | $3,000.00 | $175,824.86
2005 | $14,000.00 | $28,000.00 | $4,000.00 | $170,200.83
2006 | $15,000.00 | $29,000.00 | $4,000.00 | $164,445.25
2007 | $15,500.00 | $29,500.00 | $4,000.00 | $155,436.29
2008 | $15,500.00 | $30,500.00 | $5,000.00 | $149,796.87
2009 | $16,500.00 | $32,500.00 | $5,000.00 | $146,859.68
2010 | $16,500.00 | $32,500.00 | $5,000.00 | $135,981.19
2011 | $16,500.00 | $32,500.00 | $5,000.00 | $125,908.51
2012 | $17,000.00 | $33,000.00 | $5,000.00 | $118,740.87
2013 | $17,500.00 | $33,500.00 | $5,500.00 | $112,943.76
2014 | $17,500.00 | $34,500.00 | $5,500.00 | $106,428.49
2015 | $18,000.00 | $35,000.00 | $5,500.00 | $100,258.72
2016 | $18,000.00 | $35,000.00 | $5,500.00 | $92,832.15
2017 | $18,000.00 | $36,000.00 | $5,500.00 | $87,425.02
2018 | $18,500.00 | $36,500.00 | $5,500.00 | $82,309.58
2019 | $19,000.00 | $37,000.00 | $6,000.00 | $78,102.14
2020 | $19,500.00 | $37,500.00 | $6,000.00 | $73,483.20
2021 | $19,500.00 | $38,500.00 | $6,000.00 | $69,120.00
2022 | $20,500.00 | $40,500.00 | $6,000.00 | $67,000.00
TOTAL = $3,569,270.68

Even with 25 years of maximum savings and very optimistic returns, a single person cannot have anything close to $5M! If OP is only 42, then the first five rows are all zero, which cuts out nearly $1M from what they could have down to more like $$2.6M.

In the more likely scenario that your employer is matching up to 50% of ALL your contributions vs. the federal maximum, the total for a 47 year old becomes only $1.9M. Even doubled for two spouses maxing out for 25 years at this rate isn't even $4M!!!

So, OP, don't believe the so-called outliers on DCUM. You should know that they are outright liars. The math is irrefutable. You're doing great. Stay the course.

I wouldn't say they are liars rather they report things how they think of them--that is someone asks how much do they have in retirement and they give their HH retirement account balance (401k, 403b, 457, Traditional and Roth IRAs)--which can be 2 people often maxing out. Even if someone asks 401k I assume that's their shorthand for 'designated retirement accounts' --and I haven't split my spouse and my accounting--I have a number that includes all of our accounts--old 401ks we haven't rolled over, rollover IRAs, current accounts etc.

[Anonymous]

Anonymous wrote:Probably (re-)stating the obvious, but ...

Not everyone has access to Mega-Backdoor Roth contribution options in through their employer retirement plans. So, just because there is a $61K hard upper limit, there may not be a way for an employee to reach that mark **within** their employer's plan ... regardless of salary.

Padding your brokerage accounts (outside of employer plans) has no upper limit.

...

It took me roughly 15 years to reach the $1M mark with my employer plan (401a + 403b) and Roth IRA. It took less than 5 years to then go from $1M to $2M. And then 18 months to go from $2M to $3M in July 2021. I peaked around $3.26M at Christmas.

A 50% increase from January 2020 to July 2021 is impressive. This beats the S&P 500 over the same timeframe. Sounds like a 90-100% large cap growth portfolio like TBCIX, or is it something else? If you are in mostly large cap growth, how has it fared since Christmas? Most heavy growth funds are still down 20-25% since then and more than 30% since growth fund highs around Thanksgiving.

[Anonymous]

I forgot to log in when I posted ...

A 50% increase from January 2020 to July 2021 is impressive. This beats the S&P 500 over the same timeframe. Sounds like a 90-100% large cap growth portfolio like TBCIX, or is it something else? If you are in mostly large cap growth, how has it fared since Christmas? Most heavy growth funds are still down 20-25% since then and more than 30% since growth fund highs around Thanksgiving.

I was spread across 20+ Fidelity funds through the end of 2020 (Magellan, Blue Chip Growth, Dividend Growth, some Select funds etc.). My employer's program was effectively "reset" on January 2021 (all holdings were liquidated and immediately purchased into "other" investments), so I took that opportunity to finally pay attention to expense ratios and moved entirely to index funds. I went from 100% stock-heavy funds to an 80%-20% portfolio with "only" seven or so funds like FXAIX (largest holding ... around 60%), FUAMX, FSSNX, etc. Now, I'm rebalancing annually to add one more percent to the bond side until I reach 60/40.

I basically rode the wave back up from March 2020 to that July. That was likely the biggest factor behind the growth. I've probably been down as much as $500K at points in 2022, but I am slowly crawling back up.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:How can you be a super saver in a 401k? You can only put in $19,500. That makes for a nice retirement, but it's not 5m in the bank.

its amazing how many people on this board don't understand retirement plans and how they work. Combined contribution (employee + employer) maximums for 2022 are $61,000 (under 50) or $67,500 (over 50). Those limits easily allow for 5M in the bank. Take into account that some of that can be Roth / post tax, and it realizes you even more in retirement.

I agree. And you're one of them! Let's just run the numbers shall we?!?!

Let's say that OP is 47 years old and has been investing the absolute maximum employee contribution into a 401k for 25 years AND has been receiving the absolute maximum employer contribution for 25 years AND has been maxing out IRA contributions for 25 years. This is EXTREMLY difficult to do, BTW, since most employers come nowhere close to contributing the maximum amount. Let’s not also forget that 25 years ago the max employee, employer, and IRA contributions were $9,500.00, $20,500.00, and $2,000.00, respectively.

Let’s also assume that OP has been earning a very respectable 8% YoY return on all contributions over 25 years. The retirement savings contributions break down as follows:

A = Contribution Year
B = Max 401k Employee Contribution in Year A
C = Max 401k Employer Contribution in Year A
D = Max IRA Contribution in Year A
E = B + C + D in 2022 dollars after YoY compunding since Year A

A | B | C | D | E
1997 | $9,500.00 |$20,500.00 | $2,000.00 | $219,151.21
1998 | $10,000.00 | $20,000.00 | $2,000.00 | $202,917.78
1999 | $10,000.00 | $20,000.00 | $2,000.00 | $187,886.84
2000 | $10,500.00 | $19,500.00 | $2,000.00 | $173,969.29
2001 | $10,500.00 | $24,500.00 | $2,000.00 | $186,251.85
2002 | $11,000.00 | $29,000.00 | $3,000.00 | $200,421.16
2003 | $12,000.00 | $28,000.00 | $3,000.00 | $185,575.15
2004 | $13,000.00 | $28,000.00 | $3,000.00 | $175,824.86
2005 | $14,000.00 | $28,000.00 | $4,000.00 | $170,200.83
2006 | $15,000.00 | $29,000.00 | $4,000.00 | $164,445.25
2007 | $15,500.00 | $29,500.00 | $4,000.00 | $155,436.29
2008 | $15,500.00 | $30,500.00 | $5,000.00 | $149,796.87
2009 | $16,500.00 | $32,500.00 | $5,000.00 | $146,859.68
2010 | $16,500.00 | $32,500.00 | $5,000.00 | $135,981.19
2011 | $16,500.00 | $32,500.00 | $5,000.00 | $125,908.51
2012 | $17,000.00 | $33,000.00 | $5,000.00 | $118,740.87
2013 | $17,500.00 | $33,500.00 | $5,500.00 | $112,943.76
2014 | $17,500.00 | $34,500.00 | $5,500.00 | $106,428.49
2015 | $18,000.00 | $35,000.00 | $5,500.00 | $100,258.72
2016 | $18,000.00 | $35,000.00 | $5,500.00 | $92,832.15
2017 | $18,000.00 | $36,000.00 | $5,500.00 | $87,425.02
2018 | $18,500.00 | $36,500.00 | $5,500.00 | $82,309.58
2019 | $19,000.00 | $37,000.00 | $6,000.00 | $78,102.14
2020 | $19,500.00 | $37,500.00 | $6,000.00 | $73,483.20
2021 | $19,500.00 | $38,500.00 | $6,000.00 | $69,120.00
2022 | $20,500.00 | $40,500.00 | $6,000.00 | $67,000.00
TOTAL = $3,569,270.68

Even with 25 years of maximum savings and very optimistic returns, a single person cannot have anything close to $5M! If OP is only 42, then the first five rows are all zero, which cuts out nearly $1M from what they could have down to more like $$2.6M.

In the more likely scenario that your employer is matching up to 50% of ALL your contributions vs. the federal maximum, the total for a 47 year old becomes only $1.9M. Even doubled for two spouses maxing out for 25 years at this rate isn't even $4M!!!

So, OP, don't believe the so-called outliers on DCUM. You should know that they are outright liars. The math is irrefutable. You're doing great. Stay the course.

Looks like you forgot rate of return and discount factor to calculate the value of this annuity. If they were making at least 3% annually on their contributions, they would be exactly at $5mm

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Super savers are generally idiots. Why deny yourself today in the hopes of indulging next month when you could get cancer and die next week?

Save, yes, for sure. But not at the expense of living fully for the present.

Speaking of idiots...

Don’t make this thread about you, love.

All of these people who say live today you could die tomorrow are selfish unless they are single. The fact that you could get cancer and die tomorrow is exactly the reason to save so your family has money. Most of these spent it today idiots are probably underinsured as well.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:How can you be a super saver in a 401k? You can only put in $19,500. That makes for a nice retirement, but it's not 5m in the bank.

its amazing how many people on this board don't understand retirement plans and how they work. Combined contribution (employee + employer) maximums for 2022 are $61,000 (under 50) or $67,500 (over 50). Those limits easily allow for 5M in the bank. Take into account that some of that can be Roth / post tax, and it realizes you even more in retirement.

I agree. And you're one of them! Let's just run the numbers shall we?!?!

Let's say that OP is 47 years old and has been investing the absolute maximum employee contribution into a 401k for 25 years AND has been receiving the absolute maximum employer contribution for 25 years AND has been maxing out IRA contributions for 25 years. This is EXTREMLY difficult to do, BTW, since most employers come nowhere close to contributing the maximum amount. Let’s not also forget that 25 years ago the max employee, employer, and IRA contributions were $9,500.00, $20,500.00, and $2,000.00, respectively.

Let’s also assume that OP has been earning a very respectable 8% YoY return on all contributions over 25 years. The retirement savings contributions break down as follows:

A = Contribution Year
B = Max 401k Employee Contribution in Year A
C = Max 401k Employer Contribution in Year A
D = Max IRA Contribution in Year A
E = B + C + D in 2022 dollars after YoY compunding since Year A

A | B | C | D | E
1997 | $9,500.00 |$20,500.00 | $2,000.00 | $219,151.21
1998 | $10,000.00 | $20,000.00 | $2,000.00 | $202,917.78
1999 | $10,000.00 | $20,000.00 | $2,000.00 | $187,886.84
2000 | $10,500.00 | $19,500.00 | $2,000.00 | $173,969.29
2001 | $10,500.00 | $24,500.00 | $2,000.00 | $186,251.85
2002 | $11,000.00 | $29,000.00 | $3,000.00 | $200,421.16
2003 | $12,000.00 | $28,000.00 | $3,000.00 | $185,575.15
2004 | $13,000.00 | $28,000.00 | $3,000.00 | $175,824.86
2005 | $14,000.00 | $28,000.00 | $4,000.00 | $170,200.83
2006 | $15,000.00 | $29,000.00 | $4,000.00 | $164,445.25
2007 | $15,500.00 | $29,500.00 | $4,000.00 | $155,436.29
2008 | $15,500.00 | $30,500.00 | $5,000.00 | $149,796.87
2009 | $16,500.00 | $32,500.00 | $5,000.00 | $146,859.68
2010 | $16,500.00 | $32,500.00 | $5,000.00 | $135,981.19
2011 | $16,500.00 | $32,500.00 | $5,000.00 | $125,908.51
2012 | $17,000.00 | $33,000.00 | $5,000.00 | $118,740.87
2013 | $17,500.00 | $33,500.00 | $5,500.00 | $112,943.76
2014 | $17,500.00 | $34,500.00 | $5,500.00 | $106,428.49
2015 | $18,000.00 | $35,000.00 | $5,500.00 | $100,258.72
2016 | $18,000.00 | $35,000.00 | $5,500.00 | $92,832.15
2017 | $18,000.00 | $36,000.00 | $5,500.00 | $87,425.02
2018 | $18,500.00 | $36,500.00 | $5,500.00 | $82,309.58
2019 | $19,000.00 | $37,000.00 | $6,000.00 | $78,102.14
2020 | $19,500.00 | $37,500.00 | $6,000.00 | $73,483.20
2021 | $19,500.00 | $38,500.00 | $6,000.00 | $69,120.00
2022 | $20,500.00 | $40,500.00 | $6,000.00 | $67,000.00
TOTAL = $3,569,270.68

Even with 25 years of maximum savings and very optimistic returns, a single person cannot have anything close to $5M! If OP is only 42, then the first five rows are all zero, which cuts out nearly $1M from what they could have down to more like $$2.6M.

In the more likely scenario that your employer is matching up to 50% of ALL your contributions vs. the federal maximum, the total for a 47 year old becomes only $1.9M. Even doubled for two spouses maxing out for 25 years at this rate isn't even $4M!!!

So, OP, don't believe the so-called outliers on DCUM. You should know that they are outright liars. The math is irrefutable. You're doing great. Stay the course.

Looks like you forgot rate of return and discount factor to calculate the value of this annuity. If they were making at least 3% annually on their contributions, they would be exactly at $5mm

DP. This PP said: Let’s also assume that OP has been earning a very respectable 8% YoY return on all contributions over 25 years.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:How can you be a super saver in a 401k? You can only put in $19,500. That makes for a nice retirement, but it's not 5m in the bank.

its amazing how many people on this board don't understand retirement plans and how they work. Combined contribution (employee + employer) maximums for 2022 are $61,000 (under 50) or $67,500 (over 50). Those limits easily allow for 5M in the bank. Take into account that some of that can be Roth / post tax, and it realizes you even more in retirement.

I agree. And you're one of them! Let's just run the numbers shall we?!?!

Let's say that OP is 47 years old and has been investing the absolute maximum employee contribution into a 401k for 25 years AND has been receiving the absolute maximum employer contribution for 25 years AND has been maxing out IRA contributions for 25 years. This is EXTREMLY difficult to do, BTW, since most employers come nowhere close to contributing the maximum amount. Let’s not also forget that 25 years ago the max employee, employer, and IRA contributions were $9,500.00, $20,500.00, and $2,000.00, respectively.

Let’s also assume that OP has been earning a very respectable 8% YoY return on all contributions over 25 years. The retirement savings contributions break down as follows:

A = Contribution Year
B = Max 401k Employee Contribution in Year A
C = Max 401k Employer Contribution in Year A
D = Max IRA Contribution in Year A
E = B + C + D in 2022 dollars after YoY compunding since Year A

A | B | C | D | E
1997 | $9,500.00 |$20,500.00 | $2,000.00 | $219,151.21
1998 | $10,000.00 | $20,000.00 | $2,000.00 | $202,917.78
1999 | $10,000.00 | $20,000.00 | $2,000.00 | $187,886.84
2000 | $10,500.00 | $19,500.00 | $2,000.00 | $173,969.29
2001 | $10,500.00 | $24,500.00 | $2,000.00 | $186,251.85
2002 | $11,000.00 | $29,000.00 | $3,000.00 | $200,421.16
2003 | $12,000.00 | $28,000.00 | $3,000.00 | $185,575.15
2004 | $13,000.00 | $28,000.00 | $3,000.00 | $175,824.86
2005 | $14,000.00 | $28,000.00 | $4,000.00 | $170,200.83
2006 | $15,000.00 | $29,000.00 | $4,000.00 | $164,445.25
2007 | $15,500.00 | $29,500.00 | $4,000.00 | $155,436.29
2008 | $15,500.00 | $30,500.00 | $5,000.00 | $149,796.87
2009 | $16,500.00 | $32,500.00 | $5,000.00 | $146,859.68
2010 | $16,500.00 | $32,500.00 | $5,000.00 | $135,981.19
2011 | $16,500.00 | $32,500.00 | $5,000.00 | $125,908.51
2012 | $17,000.00 | $33,000.00 | $5,000.00 | $118,740.87
2013 | $17,500.00 | $33,500.00 | $5,500.00 | $112,943.76
2014 | $17,500.00 | $34,500.00 | $5,500.00 | $106,428.49
2015 | $18,000.00 | $35,000.00 | $5,500.00 | $100,258.72
2016 | $18,000.00 | $35,000.00 | $5,500.00 | $92,832.15
2017 | $18,000.00 | $36,000.00 | $5,500.00 | $87,425.02
2018 | $18,500.00 | $36,500.00 | $5,500.00 | $82,309.58
2019 | $19,000.00 | $37,000.00 | $6,000.00 | $78,102.14
2020 | $19,500.00 | $37,500.00 | $6,000.00 | $73,483.20
2021 | $19,500.00 | $38,500.00 | $6,000.00 | $69,120.00
2022 | $20,500.00 | $40,500.00 | $6,000.00 | $67,000.00
TOTAL = $3,569,270.68

Even with 25 years of maximum savings and very optimistic returns, a single person cannot have anything close to $5M! If OP is only 42, then the first five rows are all zero, which cuts out nearly $1M from what they could have down to more like $$2.6M.

In the more likely scenario that your employer is matching up to 50% of ALL your contributions vs. the federal maximum, the total for a 47 year old becomes only $1.9M. Even doubled for two spouses maxing out for 25 years at this rate isn't even $4M!!!

So, OP, don't believe the so-called outliers on DCUM. You should know that they are outright liars. The math is irrefutable. You're doing great. Stay the course.

Looks like you forgot rate of return and discount factor to calculate the value of this annuity. If they were making at least 3% annually on their contributions, they would be exactly at $5mm

DP. This PP said: Let’s also assume that OP has been earning a very respectable 8% YoY return on all contributions over 25 years.

It looks like in Column E the total stopped growing and began decreasing in 2003.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:How can you be a super saver in a 401k? You can only put in $19,500. That makes for a nice retirement, but it's not 5m in the bank.

its amazing how many people on this board don't understand retirement plans and how they work. Combined contribution (employee + employer) maximums for 2022 are $61,000 (under 50) or $67,500 (over 50). Those limits easily allow for 5M in the bank. Take into account that some of that can be Roth / post tax, and it realizes you even more in retirement.

I agree. And you're one of them! Let's just run the numbers shall we?!?!

Let's say that OP is 47 years old and has been investing the absolute maximum employee contribution into a 401k for 25 years AND has been receiving the absolute maximum employer contribution for 25 years AND has been maxing out IRA contributions for 25 years. This is EXTREMLY difficult to do, BTW, since most employers come nowhere close to contributing the maximum amount. Let’s not also forget that 25 years ago the max employee, employer, and IRA contributions were $9,500.00, $20,500.00, and $2,000.00, respectively.

Let’s also assume that OP has been earning a very respectable 8% YoY return on all contributions over 25 years. The retirement savings contributions break down as follows:

A = Contribution Year
B = Max 401k Employee Contribution in Year A
C = Max 401k Employer Contribution in Year A
D = Max IRA Contribution in Year A
E = B + C + D in 2022 dollars after YoY compunding since Year A

A | B | C | D | E
1997 | $9,500.00 |$20,500.00 | $2,000.00 | $219,151.21
1998 | $10,000.00 | $20,000.00 | $2,000.00 | $202,917.78
1999 | $10,000.00 | $20,000.00 | $2,000.00 | $187,886.84
2000 | $10,500.00 | $19,500.00 | $2,000.00 | $173,969.29
2001 | $10,500.00 | $24,500.00 | $2,000.00 | $186,251.85
2002 | $11,000.00 | $29,000.00 | $3,000.00 | $200,421.16
2003 | $12,000.00 | $28,000.00 | $3,000.00 | $185,575.15
2004 | $13,000.00 | $28,000.00 | $3,000.00 | $175,824.86
2005 | $14,000.00 | $28,000.00 | $4,000.00 | $170,200.83
2006 | $15,000.00 | $29,000.00 | $4,000.00 | $164,445.25
2007 | $15,500.00 | $29,500.00 | $4,000.00 | $155,436.29
2008 | $15,500.00 | $30,500.00 | $5,000.00 | $149,796.87
2009 | $16,500.00 | $32,500.00 | $5,000.00 | $146,859.68
2010 | $16,500.00 | $32,500.00 | $5,000.00 | $135,981.19
2011 | $16,500.00 | $32,500.00 | $5,000.00 | $125,908.51
2012 | $17,000.00 | $33,000.00 | $5,000.00 | $118,740.87
2013 | $17,500.00 | $33,500.00 | $5,500.00 | $112,943.76
2014 | $17,500.00 | $34,500.00 | $5,500.00 | $106,428.49
2015 | $18,000.00 | $35,000.00 | $5,500.00 | $100,258.72
2016 | $18,000.00 | $35,000.00 | $5,500.00 | $92,832.15
2017 | $18,000.00 | $36,000.00 | $5,500.00 | $87,425.02
2018 | $18,500.00 | $36,500.00 | $5,500.00 | $82,309.58
2019 | $19,000.00 | $37,000.00 | $6,000.00 | $78,102.14
2020 | $19,500.00 | $37,500.00 | $6,000.00 | $73,483.20
2021 | $19,500.00 | $38,500.00 | $6,000.00 | $69,120.00
2022 | $20,500.00 | $40,500.00 | $6,000.00 | $67,000.00
TOTAL = $3,569,270.68

Even with 25 years of maximum savings and very optimistic returns, a single person cannot have anything close to $5M! If OP is only 42, then the first five rows are all zero, which cuts out nearly $1M from what they could have down to more like $$2.6M.

In the more likely scenario that your employer is matching up to 50% of ALL your contributions vs. the federal maximum, the total for a 47 year old becomes only $1.9M. Even doubled for two spouses maxing out for 25 years at this rate isn't even $4M!!!

So, OP, don't believe the so-called outliers on DCUM. You should know that they are outright liars. The math is irrefutable. You're doing great. Stay the course.

Looks like you forgot rate of return and discount factor to calculate the value of this annuity. If they were making at least 3% annually on their contributions, they would be exactly at $5mm

DP. This PP said: Let’s also assume that OP has been earning a very respectable 8% YoY return on all contributions over 25 years.

It looks like in Column E the total stopped growing and began decreasing in 2003.

Yea, his calculations are all messed up. No way the column E would be decreasing: S&P was returning 8% average

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:How can you be a super saver in a 401k? You can only put in $19,500. That makes for a nice retirement, but it's not 5m in the bank.

its amazing how many people on this board don't understand retirement plans and how they work. Combined contribution (employee + employer) maximums for 2022 are $61,000 (under 50) or $67,500 (over 50). Those limits easily allow for 5M in the bank. Take into account that some of that can be Roth / post tax, and it realizes you even more in retirement.

I agree. And you're one of them! Let's just run the numbers shall we?!?!

Let's say that OP is 47 years old and has been investing the absolute maximum employee contribution into a 401k for 25 years AND has been receiving the absolute maximum employer contribution for 25 years AND has been maxing out IRA contributions for 25 years. This is EXTREMLY difficult to do, BTW, since most employers come nowhere close to contributing the maximum amount. Let’s not also forget that 25 years ago the max employee, employer, and IRA contributions were $9,500.00, $20,500.00, and $2,000.00, respectively.

Let’s also assume that OP has been earning a very respectable 8% YoY return on all contributions over 25 years. The retirement savings contributions break down as follows:

A = Contribution Year
B = Max 401k Employee Contribution in Year A
C = Max 401k Employer Contribution in Year A
D = Max IRA Contribution in Year A
E = B + C + D in 2022 dollars after YoY compunding since Year A

A | B | C | D | E
1997 | $9,500.00 |$20,500.00 | $2,000.00 | $219,151.21
1998 | $10,000.00 | $20,000.00 | $2,000.00 | $202,917.78
1999 | $10,000.00 | $20,000.00 | $2,000.00 | $187,886.84
2000 | $10,500.00 | $19,500.00 | $2,000.00 | $173,969.29
2001 | $10,500.00 | $24,500.00 | $2,000.00 | $186,251.85
2002 | $11,000.00 | $29,000.00 | $3,000.00 | $200,421.16
2003 | $12,000.00 | $28,000.00 | $3,000.00 | $185,575.15
2004 | $13,000.00 | $28,000.00 | $3,000.00 | $175,824.86
2005 | $14,000.00 | $28,000.00 | $4,000.00 | $170,200.83
2006 | $15,000.00 | $29,000.00 | $4,000.00 | $164,445.25
2007 | $15,500.00 | $29,500.00 | $4,000.00 | $155,436.29
2008 | $15,500.00 | $30,500.00 | $5,000.00 | $149,796.87
2009 | $16,500.00 | $32,500.00 | $5,000.00 | $146,859.68
2010 | $16,500.00 | $32,500.00 | $5,000.00 | $135,981.19
2011 | $16,500.00 | $32,500.00 | $5,000.00 | $125,908.51
2012 | $17,000.00 | $33,000.00 | $5,000.00 | $118,740.87
2013 | $17,500.00 | $33,500.00 | $5,500.00 | $112,943.76
2014 | $17,500.00 | $34,500.00 | $5,500.00 | $106,428.49
2015 | $18,000.00 | $35,000.00 | $5,500.00 | $100,258.72
2016 | $18,000.00 | $35,000.00 | $5,500.00 | $92,832.15
2017 | $18,000.00 | $36,000.00 | $5,500.00 | $87,425.02
2018 | $18,500.00 | $36,500.00 | $5,500.00 | $82,309.58
2019 | $19,000.00 | $37,000.00 | $6,000.00 | $78,102.14
2020 | $19,500.00 | $37,500.00 | $6,000.00 | $73,483.20
2021 | $19,500.00 | $38,500.00 | $6,000.00 | $69,120.00
2022 | $20,500.00 | $40,500.00 | $6,000.00 | $67,000.00
TOTAL = $3,569,270.68

Even with 25 years of maximum savings and very optimistic returns, a single person cannot have anything close to $5M! If OP is only 42, then the first five rows are all zero, which cuts out nearly $1M from what they could have down to more like $$2.6M.

In the more likely scenario that your employer is matching up to 50% of ALL your contributions vs. the federal maximum, the total for a 47 year old becomes only $1.9M. Even doubled for two spouses maxing out for 25 years at this rate isn't even $4M!!!

So, OP, don't believe the so-called outliers on DCUM. You should know that they are outright liars. The math is irrefutable. You're doing great. Stay the course.

Looks like you forgot rate of return and discount factor to calculate the value of this annuity. If they were making at least 3% annually on their contributions, they would be exactly at $5mm

DP. This PP said: Let’s also assume that OP has been earning a very respectable 8% YoY return on all contributions over 25 years.

It looks like in Column E the total stopped growing and began decreasing in 2003.

Yea, his calculations are all messed up. No way the column E would be decreasing: S&P was returning 8% average

I think Column E represents what each line would have increased by the end of 2022 with a 8% YoY return. This is why the last line (2022) is only the total amount, since it wouldn't have had time to increase. Add Column E and then get the total, is how I'm assuming it was computed.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:How can you be a super saver in a 401k? You can only put in $19,500. That makes for a nice retirement, but it's not 5m in the bank.

its amazing how many people on this board don't understand retirement plans and how they work. Combined contribution (employee + employer) maximums for 2022 are $61,000 (under 50) or $67,500 (over 50). Those limits easily allow for 5M in the bank. Take into account that some of that can be Roth / post tax, and it realizes you even more in retirement.

I agree. And you're one of them! Let's just run the numbers shall we?!?!

Let's say that OP is 47 years old and has been investing the absolute maximum employee contribution into a 401k for 25 years AND has been receiving the absolute maximum employer contribution for 25 years AND has been maxing out IRA contributions for 25 years. This is EXTREMLY difficult to do, BTW, since most employers come nowhere close to contributing the maximum amount. Let’s not also forget that 25 years ago the max employee, employer, and IRA contributions were $9,500.00, $20,500.00, and $2,000.00, respectively.

Let’s also assume that OP has been earning a very respectable 8% YoY return on all contributions over 25 years. The retirement savings contributions break down as follows:

A = Contribution Year
B = Max 401k Employee Contribution in Year A
C = Max 401k Employer Contribution in Year A
D = Max IRA Contribution in Year A
E = B + C + D in 2022 dollars after YoY compunding since Year A

A | B | C | D | E
1997 | $9,500.00 |$20,500.00 | $2,000.00 | $219,151.21
1998 | $10,000.00 | $20,000.00 | $2,000.00 | $202,917.78
1999 | $10,000.00 | $20,000.00 | $2,000.00 | $187,886.84
2000 | $10,500.00 | $19,500.00 | $2,000.00 | $173,969.29
2001 | $10,500.00 | $24,500.00 | $2,000.00 | $186,251.85
2002 | $11,000.00 | $29,000.00 | $3,000.00 | $200,421.16
2003 | $12,000.00 | $28,000.00 | $3,000.00 | $185,575.15
2004 | $13,000.00 | $28,000.00 | $3,000.00 | $175,824.86
2005 | $14,000.00 | $28,000.00 | $4,000.00 | $170,200.83
2006 | $15,000.00 | $29,000.00 | $4,000.00 | $164,445.25
2007 | $15,500.00 | $29,500.00 | $4,000.00 | $155,436.29
2008 | $15,500.00 | $30,500.00 | $5,000.00 | $149,796.87
2009 | $16,500.00 | $32,500.00 | $5,000.00 | $146,859.68
2010 | $16,500.00 | $32,500.00 | $5,000.00 | $135,981.19
2011 | $16,500.00 | $32,500.00 | $5,000.00 | $125,908.51
2012 | $17,000.00 | $33,000.00 | $5,000.00 | $118,740.87
2013 | $17,500.00 | $33,500.00 | $5,500.00 | $112,943.76
2014 | $17,500.00 | $34,500.00 | $5,500.00 | $106,428.49
2015 | $18,000.00 | $35,000.00 | $5,500.00 | $100,258.72
2016 | $18,000.00 | $35,000.00 | $5,500.00 | $92,832.15
2017 | $18,000.00 | $36,000.00 | $5,500.00 | $87,425.02
2018 | $18,500.00 | $36,500.00 | $5,500.00 | $82,309.58
2019 | $19,000.00 | $37,000.00 | $6,000.00 | $78,102.14
2020 | $19,500.00 | $37,500.00 | $6,000.00 | $73,483.20
2021 | $19,500.00 | $38,500.00 | $6,000.00 | $69,120.00
2022 | $20,500.00 | $40,500.00 | $6,000.00 | $67,000.00
TOTAL = $3,569,270.68

Even with 25 years of maximum savings and very optimistic returns, a single person cannot have anything close to $5M! If OP is only 42, then the first five rows are all zero, which cuts out nearly $1M from what they could have down to more like $$2.6M.

In the more likely scenario that your employer is matching up to 50% of ALL your contributions vs. the federal maximum, the total for a 47 year old becomes only $1.9M. Even doubled for two spouses maxing out for 25 years at this rate isn't even $4M!!!

So, OP, don't believe the so-called outliers on DCUM. You should know that they are outright liars. The math is irrefutable. You're doing great. Stay the course.

Looks like you forgot rate of return and discount factor to calculate the value of this annuity. If they were making at least 3% annually on their contributions, they would be exactly at $5mm

DP. This PP said: Let’s also assume that OP has been earning a very respectable 8% YoY return on all contributions over 25 years.

It looks like in Column E the total stopped growing and began decreasing in 2003.

Yea, his calculations are all messed up. No way the column E would be decreasing: S&P was returning 8% average

I think Column E represents what each line would have increased by the end of 2022 with a 8% YoY return. This is why the last line (2022) is only the total amount, since it wouldn't have had time to increase. Add Column E and then get the total, is how I'm assuming it was computed.

Yes. This is correct. Column E is the 2022 value of the contribution that was made in the year specified in column A. This is why the rows at the top tend to be larger than those at the bottom; they have had many more years to compound interest. In 2022, if you contribute $67K…it’s worth $67K. The $32K max that you might have contributed in 1997, though, has grown to $219K. Not too shabby. Start investing early!

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:How can you be a super saver in a 401k? You can only put in $19,500. That makes for a nice retirement, but it's not 5m in the bank.

its amazing how many people on this board don't understand retirement plans and how they work. Combined contribution (employee + employer) maximums for 2022 are $61,000 (under 50) or $67,500 (over 50). Those limits easily allow for 5M in the bank. Take into account that some of that can be Roth / post tax, and it realizes you even more in retirement.

I agree. And you're one of them! Let's just run the numbers shall we?!?!

Let's say that OP is 47 years old and has been investing the absolute maximum employee contribution into a 401k for 25 years AND has been receiving the absolute maximum employer contribution for 25 years AND has been maxing out IRA contributions for 25 years. This is EXTREMLY difficult to do, BTW, since most employers come nowhere close to contributing the maximum amount. Let’s not also forget that 25 years ago the max employee, employer, and IRA contributions were $9,500.00, $20,500.00, and $2,000.00, respectively.

Let’s also assume that OP has been earning a very respectable 8% YoY return on all contributions over 25 years. The retirement savings contributions break down as follows:

A = Contribution Year
B = Max 401k Employee Contribution in Year A
C = Max 401k Employer Contribution in Year A
D = Max IRA Contribution in Year A
E = B + C + D in 2022 dollars after YoY compunding since Year A

A | B | C | D | E
1997 | $9,500.00 |$20,500.00 | $2,000.00 | $219,151.21
1998 | $10,000.00 | $20,000.00 | $2,000.00 | $202,917.78
1999 | $10,000.00 | $20,000.00 | $2,000.00 | $187,886.84
2000 | $10,500.00 | $19,500.00 | $2,000.00 | $173,969.29
2001 | $10,500.00 | $24,500.00 | $2,000.00 | $186,251.85
2002 | $11,000.00 | $29,000.00 | $3,000.00 | $200,421.16
2003 | $12,000.00 | $28,000.00 | $3,000.00 | $185,575.15
2004 | $13,000.00 | $28,000.00 | $3,000.00 | $175,824.86
2005 | $14,000.00 | $28,000.00 | $4,000.00 | $170,200.83
2006 | $15,000.00 | $29,000.00 | $4,000.00 | $164,445.25
2007 | $15,500.00 | $29,500.00 | $4,000.00 | $155,436.29
2008 | $15,500.00 | $30,500.00 | $5,000.00 | $149,796.87
2009 | $16,500.00 | $32,500.00 | $5,000.00 | $146,859.68
2010 | $16,500.00 | $32,500.00 | $5,000.00 | $135,981.19
2011 | $16,500.00 | $32,500.00 | $5,000.00 | $125,908.51
2012 | $17,000.00 | $33,000.00 | $5,000.00 | $118,740.87
2013 | $17,500.00 | $33,500.00 | $5,500.00 | $112,943.76
2014 | $17,500.00 | $34,500.00 | $5,500.00 | $106,428.49
2015 | $18,000.00 | $35,000.00 | $5,500.00 | $100,258.72
2016 | $18,000.00 | $35,000.00 | $5,500.00 | $92,832.15
2017 | $18,000.00 | $36,000.00 | $5,500.00 | $87,425.02
2018 | $18,500.00 | $36,500.00 | $5,500.00 | $82,309.58
2019 | $19,000.00 | $37,000.00 | $6,000.00 | $78,102.14
2020 | $19,500.00 | $37,500.00 | $6,000.00 | $73,483.20
2021 | $19,500.00 | $38,500.00 | $6,000.00 | $69,120.00
2022 | $20,500.00 | $40,500.00 | $6,000.00 | $67,000.00
TOTAL = $3,569,270.68

Even with 25 years of maximum savings and very optimistic returns, a single person cannot have anything close to $5M! If OP is only 42, then the first five rows are all zero, which cuts out nearly $1M from what they could have down to more like $$2.6M.

In the more likely scenario that your employer is matching up to 50% of ALL your contributions vs. the federal maximum, the total for a 47 year old becomes only $1.9M. Even doubled for two spouses maxing out for 25 years at this rate isn't even $4M!!!

So, OP, don't believe the so-called outliers on DCUM. You should know that they are outright liars. The math is irrefutable. You're doing great. Stay the course.

Looks like you forgot rate of return and discount factor to calculate the value of this annuity. If they were making at least 3% annually on their contributions, they would be exactly at $5mm

DP. This PP said: Let’s also assume that OP has been earning a very respectable 8% YoY return on all contributions over 25 years.

It looks like in Column E the total stopped growing and began decreasing in 2003.

Yea, his calculations are all messed up. No way the column E would be decreasing: S&P was returning 8% average

No. Column E is not a running total. Each row is a measure of the final 401k balance that can be attributed to the contributions made during that particular year. So, when you look at your 401k balance in 2022 and it is $3,569,270, you’ll know that 219,151 of those dollars are due to the money you contributed in 1997 (first row).

This is broken out on a per year basis because the max contributions change pretty much every year and prevent one from defining a closed form equation for the underlying geometric series.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:How can you be a super saver in a 401k? You can only put in $19,500. That makes for a nice retirement, but it's not 5m in the bank.

its amazing how many people on this board don't understand retirement plans and how they work. Combined contribution (employee + employer) maximums for 2022 are $61,000 (under 50) or $67,500 (over 50). Those limits easily allow for 5M in the bank. Take into account that some of that can be Roth / post tax, and it realizes you even more in retirement.

I agree. And you're one of them! Let's just run the numbers shall we?!?!

Let's say that OP is 47 years old and has been investing the absolute maximum employee contribution into a 401k for 25 years AND has been receiving the absolute maximum employer contribution for 25 years AND has been maxing out IRA contributions for 25 years. This is EXTREMLY difficult to do, BTW, since most employers come nowhere close to contributing the maximum amount. Let’s not also forget that 25 years ago the max employee, employer, and IRA contributions were $9,500.00, $20,500.00, and $2,000.00, respectively.

Let’s also assume that OP has been earning a very respectable 8% YoY return on all contributions over 25 years. The retirement savings contributions break down as follows:

A = Contribution Year
B = Max 401k Employee Contribution in Year A
C = Max 401k Employer Contribution in Year A
D = Max IRA Contribution in Year A
E = B + C + D in 2022 dollars after YoY compunding since Year A

A | B | C | D | E
1997 | $9,500.00 |$20,500.00 | $2,000.00 | $219,151.21
1998 | $10,000.00 | $20,000.00 | $2,000.00 | $202,917.78
1999 | $10,000.00 | $20,000.00 | $2,000.00 | $187,886.84
2000 | $10,500.00 | $19,500.00 | $2,000.00 | $173,969.29
2001 | $10,500.00 | $24,500.00 | $2,000.00 | $186,251.85
2002 | $11,000.00 | $29,000.00 | $3,000.00 | $200,421.16
2003 | $12,000.00 | $28,000.00 | $3,000.00 | $185,575.15
2004 | $13,000.00 | $28,000.00 | $3,000.00 | $175,824.86
2005 | $14,000.00 | $28,000.00 | $4,000.00 | $170,200.83
2006 | $15,000.00 | $29,000.00 | $4,000.00 | $164,445.25
2007 | $15,500.00 | $29,500.00 | $4,000.00 | $155,436.29
2008 | $15,500.00 | $30,500.00 | $5,000.00 | $149,796.87
2009 | $16,500.00 | $32,500.00 | $5,000.00 | $146,859.68
2010 | $16,500.00 | $32,500.00 | $5,000.00 | $135,981.19
2011 | $16,500.00 | $32,500.00 | $5,000.00 | $125,908.51
2012 | $17,000.00 | $33,000.00 | $5,000.00 | $118,740.87
2013 | $17,500.00 | $33,500.00 | $5,500.00 | $112,943.76
2014 | $17,500.00 | $34,500.00 | $5,500.00 | $106,428.49
2015 | $18,000.00 | $35,000.00 | $5,500.00 | $100,258.72
2016 | $18,000.00 | $35,000.00 | $5,500.00 | $92,832.15
2017 | $18,000.00 | $36,000.00 | $5,500.00 | $87,425.02
2018 | $18,500.00 | $36,500.00 | $5,500.00 | $82,309.58
2019 | $19,000.00 | $37,000.00 | $6,000.00 | $78,102.14
2020 | $19,500.00 | $37,500.00 | $6,000.00 | $73,483.20
2021 | $19,500.00 | $38,500.00 | $6,000.00 | $69,120.00
2022 | $20,500.00 | $40,500.00 | $6,000.00 | $67,000.00
TOTAL = $3,569,270.68

Even with 25 years of maximum savings and very optimistic returns, a single person cannot have anything close to $5M! If OP is only 42, then the first five rows are all zero, which cuts out nearly $1M from what they could have down to more like $$2.6M.

In the more likely scenario that your employer is matching up to 50% of ALL your contributions vs. the federal maximum, the total for a 47 year old becomes only $1.9M. Even doubled for two spouses maxing out for 25 years at this rate isn't even $4M!!!

So, OP, don't believe the so-called outliers on DCUM. You should know that they are outright liars. The math is irrefutable. You're doing great. Stay the course.

Looks like you forgot rate of return and discount factor to calculate the value of this annuity. If they were making at least 3% annually on their contributions, they would be exactly at $5mm

DP. This PP said: Let’s also assume that OP has been earning a very respectable 8% YoY return on all contributions over 25 years.

It looks like in Column E the total stopped growing and began decreasing in 2003.

Yea, his calculations are all messed up. No way the column E would be decreasing: S&P was returning 8% average

I think Column E represents what each line would have increased by the end of 2022 with a 8% YoY return. This is why the last line (2022) is only the total amount, since it wouldn't have had time to increase. Add Column E and then get the total, is how I'm assuming it was computed.

Yes. This is correct. Column E is the 2022 value of the contribution that was made in the year specified in column A. This is why the rows at the top tend to be larger than those at the bottom; they have had many more years to compound interest. In 2022, if you contribute $67K…it’s worth $67K. The $32K max that you might have contributed in 1997, though, has grown to $219K. Not too shabby. Start investing early!

Thanks for the time you took to show this year by year, PP. Can you tell me how this would differ if you had no employer 401K and therefore no employer match, and had to use a SEP IRA instead, and hadn't contributed to anything else?? Basically, I am trying to understand the difference between the max you could achieve in any given year with a SEP IRA vs a 401K. TIA if you can!

[Anonymous]

I actually have this exact table with real world numbers I’ve been meticulously tracking since 2000 when I graduated college and started maxing out my 401k. In the last decade I’ve also had a mega Roth. Additionally I glowered for an IPO that gave us stock into our 401k which had amazing returns.

My calculations also factor in years where I made 22% and with there already being a huge chunk in there it was significant. I’m 44 and sitting at just under 4M and this is after the bath I took.. Between my company match and my mega Roth I come close to the 58k maximum and probably will hit the 61k in 2022.

If I remember when I’m on my desktop and it’s convenient I’ll paste my spreadsheet here.

[Anonymous]

Is this a joke? Early 40s with $1.5m saved for retirement, mortgage paid off and college fully funded? And you feel insecure about that?

This has got to be a troll post.