why do so few people have two million dollar 401ks/IRAs?

[Anonymous]

Anonymous wrote:

Anonymous wrote:I can relate to the above poster. Mine are in various places.

take time to consolidate it. You just have to fill out a form.

it is a little more than that, usually they convert to cash and send a check so you have to reinvest.

i always keep in a single place but got hosed once , had to migrate during 2021/covid and lost out on some big gains that happened during the 2 weeks it took to mail the check and then get new brokerage to receive and then to re-invest.

[Anonymous]

3.2m here with solo 401k for self employed. 56 yrs old. Don’t remember when I hit 1M. As self-employed, allowed higher annual contributions (as long as you have a profit). I always mostly maxed out contributions. Mostly retired now. Don’t really need to make any more contributions to 401k.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I can relate to the above poster. Mine are in various places.

take time to consolidate it. You just have to fill out a form.

it is a little more than that, usually they convert to cash and send a check so you have to reinvest.

i always keep in a single place but got hosed once , had to migrate during 2021/covid and lost out on some big gains that happened during the 2 weeks it took to mail the check and then get new brokerage to receive and then to re-invest.

Be careful consolidating - some places still send you a live check and according to a recent article you don't have a lot of protection if a fraudster intercepts the check and steals your money. Craziest thing is that if you are the victim of fraud and someone steals your money, you may owe the IRS for the penalties from taking the money out early.

https://www.nytimes.com/2025/05/17/business/paychex-401k-rollover-checks.html

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I can relate to the above poster. Mine are in various places.

take time to consolidate it. You just have to fill out a form.

it is a little more than that, usually they convert to cash and send a check so you have to reinvest.

i always keep in a single place but got hosed once , had to migrate during 2021/covid and lost out on some big gains that happened during the 2 weeks it took to mail the check and then get new brokerage to receive and then to re-invest.

Be careful consolidating - some places still send you a live check and according to a recent article you don't have a lot of protection if a fraudster intercepts the check and steals your money. Craziest thing is that if you are the victim of fraud and someone steals your money, you may owe the IRS for the penalties from taking the money out early.

https://www.nytimes.com/2025/05/17/business/paychex-401k-rollover-checks.html

My last roll over in 2024 they mailed me a check from old 401k then I had to take that check and mail it to current 401k. That seems risky but was only way allowed

[Anonymous]

When I was 25 and switching jobs I cashed out my measly $4k 401 k… I used it to pay off a credit card … I had horrible personal finance skills. I often wonder what I would have now had I not done that. I started saving again at 29. I had an employer match til 39, and have worked for myself for the past 18 years and now have $1.2m.

[Anonymous]

Anonymous wrote:My good friend at work showed me her retirement account the other day - over 4000 dollars. She is 42 years old. They have 7 investment properties.

So she is allocating mostly to real estate, or just savings?

[Anonymous]

I don’t get it. I started working at around 23 years old, took off 7 years to be a SAH and at 48 I have over $1 million. I would think most people my age who started working earlier and didn’t have a huge gap in employment would have easily hit $1 million.

[Anonymous]

Anonymous wrote:I don’t get it. I started working at around 23 years old, took off 7 years to be a SAH and at 48 I have over $1 million. I would think most people my age who started working earlier and didn’t have a huge gap in employment would have easily hit $1 million.

Wild but true- many (most!) people don't make very much money, and can't save enough to get to such levels in their entire lifetime.

[Anonymous]

Anonymous wrote:I don’t get it. I started working at around 23 years old, took off 7 years to be a SAH and at 48 I have over $1 million. I would think most people my age who started working earlier and didn’t have a huge gap in employment would have easily hit $1 million.

If you are a teacher, librarian or non profit staff? No. I barely have 500k and I maxed out contributions, but have never made more than 60k a year.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I don’t get it. I started working at around 23 years old, took off 7 years to be a SAH and at 48 I have over $1 million. I would think most people my age who started working earlier and didn’t have a huge gap in employment would have easily hit $1 million.

If you are a teacher, librarian or non profit staff? No. I barely have 500k and I maxed out contributions, but have never made more than 60k a year.

I’m a teacher with a pension. My wife also works but with a below average salary. We currently have $700k in retirement and optimistically expect that to get to close to $2 million by retirement age in 13 years at age 61 or so. We have some flexibility and don’t really need $2 million, but it is a personal goal.

[Anonymous]

Anonymous wrote:Looking at charts anywhere from 5-10 percent of people have one million in their retirement accounts. But very few have two million or greater. Why is that?

With compounding, catch-ups for over 50, higher RMD ages and higher contribution limits I would imagine moved from one million to two million should happen rapidly. Money doubles from a range of 7-12 years depending how conserative your are in allocation. So lets say 10 years for a 45 year old who has one million Even if conserative and stopped putting a nickle more in it grows to two million by 55 and four million by 65 and eight million by 75 when RMDs start

So why so few two million and up savings Do people hit one million and start taking out all the money.

And there is no age limit on 401ks. If you work till 70 to get max SS from 65 to 70 not only are you not taking from 401k you are still putting in. I would imagine in 10 years a 5 million dollar 401k will be common. Or will it not be cause when people hit a certain number they start taking out?

Thanks for sharing the "charts" you are "looking" at.

[Anonymous]

Anonymous wrote:You understand that most people don't have retirement accounts, and most of those who do cannot max them out, and many of them take withdrawls, right?

Op is talking to the DCUM crowd NOT most people. I like the question.

[Anonymous]

Anonymous wrote:I started contributing to a 401k at age 23 at my first job after school and have been contributing ever since (99% of those years contributing the max) and I only have $1 million at 53. Guess I’m a loser, OP.

You were invested to conservatively. You should have 2 million by now.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I wonder if it's because many of us have had more than one job, so our retirement accounts are spread out across multiple accounts. I have a current 401k with my employer's facilitator, an IRA with Vanguard that was created by rolling over 401ks from previous employers, and a Roth IRA with Vanguard that I opened when I was younger and below the limit. Looking at them individually, none of them is particularly high, but in the aggregate, it's a nice number.

Yes, definitely this is part of it in my case -- I have more than $1 million in retirement accounts, but in multiple accounts.

No. It is because 1M is a ridiculous amount of money and 2M is 10 times as ridiculous. It does not matter how people spread out their retirement savings, very few people are going to achieve a net worth of 2M never mind 2M in retirement savings.

+1. Like the OP of the "debt" thread, this OP seems to know only people making $300k plus and doesn't seem to understand there is a whole 'nother world out there.

Exactly. Op Is asking the question of a certain demographic represented here on DCUM (not the rest of the world ) keep up please!

[Anonymous]

Anonymous wrote:

Anonymous wrote:Looking at charts anywhere from 5-10 percent of people have one million in their retirement accounts. But very few have two million or greater. Why is that?

With compounding, catch-ups for over 50, higher RMD ages and higher contribution limits I would imagine moved from one million to two million should happen rapidly. Money doubles from a range of 7-12 years depending how conserative your are in allocation. So lets say 10 years for a 45 year old who has one million Even if conserative and stopped putting a nickle more in it grows to two million by 55 and four million by 65 and eight million by 75 when RMDs start

So why so few two million and up savings Do people hit one million and start taking out all the money.

And there is no age limit on 401ks. If you work till 70 to get max SS from 65 to 70 not only are you not taking from 401k you are still putting in. I would imagine in 10 years a 5 million dollar 401k will be common. Or will it not be cause when people hit a certain number they start taking out?

401k always underperform the market because the individual chases the latest ho stocks, just does not pay attention and/or get screw on the vesting. Most people do not earn enough to accumulate a million dollars in a 401k. Also do not think you are smart because we had a great market return. It can all go away in a few months or the return can below inflation.

The big thing is you really should not have a million plus in a 401k or IRA because you are forced to withdraw as you age and there are penalties to early withdrawal. After 68 your spending declines rapidly. It stupid to have that much money with restrictions on it.

Restrictions? You can start withdrawing from a 401(k) at age 59 1/2. we do, and never touch the principal 5m.