401k and the Dow hitting 20

[Anonymous]

I am very financially naive so please don't flame me for asking this question.
Hearing about the Dow hitting 20 makes me wonder about the following:
In 2007 DH and I had 400k in a 401k. We withdrew it all and used it to make a bad investment. We have not built it back up and yes we had to pay huge taxes on the early withdrawal.
My question is had we not done that and continued to contribute (about 50k per year) what would we have now and what would it be worth? I guess just a masochist for wanting to know as I regret this decision but there is nothing we can do about it now.
Just wondering if any financial people out there could make a calculation??

[Anonymous]

It's kind of an impossible question since we have no idea how that money would have been invested.

But yeah, you'd definitely have more than you do now.

[Anonymous]

How was that money invested? Do you really want to know? It will ruin your day.

[Anonymous]

Close to a million.

[Anonymous]

Anonymous wrote:Close to a million.

No, a lot more... assuming 50k/year contribution plus avg return rate of 7% (typical for index funds).

[Anonymous]

OP here. I found an online calculator that assumes 6% and it said about 1.8. Wow.

[Anonymous]

OPs stupidity makes me feel great about myself!

[Anonymous]

Anonymous wrote:OP here. I found an online calculator that assumes 6% and it said about 1.8. Wow.

6% is a conservative estimate. Although 2007 was prior to the crash, the returns since March 2009 have been much higher. So you'd probably be over $2M.

[Anonymous]

So was the the tax on it 40 percent plus a 10 percent penalty? If you used it to buy an investment property, I could kind of rationalize this, but I have no idea.

[Anonymous]

Anonymous wrote:So was the the tax on it 40 percent plus a 10 percent penalty? If you used it to buy an investment property, I could kind of rationalize this, but I have no idea.

np. The sad thing is, you can buy an investment property with tax-sheltered IRA funds. There's no need to pay taxes/penalties.

[Anonymous]

How do you contribute 50K a year to a 401K? How old are you?

[Anonymous]

Anonymous wrote:How do you contribute 50K a year to a 401K? How old are you?

np. We do. In our 30s. Two people, IRS max, plus some employer matching/bonuses.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Close to a million.

No, a lot more... assuming 50k/year contribution plus avg return rate of 7% (typical for index funds).

You can't assume a $50k/yr contribution to a 401k.

[Anonymous]

Anonymous wrote:I am very financially naive so please don't flame me for asking this question.
Hearing about the Dow hitting 20 makes me wonder about the following:
In 2007 DH and I had 400k in a 401k. We withdrew it all and used it to make a bad investment. We have not built it back up and yes we had to pay huge taxes on the early withdrawal.
My question is had we not done that and continued to contribute (about 50k per year) what would we have now and what would it be worth? I guess just a masochist for wanting to know as I regret this decision but there is nothing we can do about it now.
Just wondering if any financial people out there could make a calculation??

True statement.

[Anonymous]

Anonymous wrote:How do you contribute 50K a year to a 401K? How old are you?

How hard is that? My oen 401k contributions last yesr were 36k (full employer match) and my DH 25k, partial match. Total retirement contributions 61k.