Reply to Is anyone NOT a 401k millionaire?

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[quote=Anonymous][quote=Anonymous][quote=Anonymous]https://www.morningstar.com/news/marketwatch/20241205305/millennials-are-finally-joining-the-401k-millionaires-club-heres-how-they-got-here

Srsly. DH and I are still in our late 20s and each of us has $1M+ in our 401ks. Is being a millionaire the new lower class? [/quote]

BS. Let's do the math. 401K max for employee is 23K this year. Most employers don't match 100% with no cap--but let's say both of yours do.

From 22 to 25, let's say you were setting aside 10 per year, so 10+10 employer (20) from 22 to 25, and then let's say you went up to 23 + 23 = 46 from 26 to 29, and let's say you're now 29 (in your 20s). Assuming a 10% annual rate of return, which is above the S&P for the past eight years, you'd each have $350K. If you somehow got a 20% annual RoR for the entire period, you'd be at $460. And lastly, if you somehow were doing 46 each the entire time with 20%, you'd be at $760 each.

[/quote]

OP here. Y’all boomers are so dumb and so jealous. Let me break it down for you.

Graduated in 2017. Got a job that paid $225K to start. Immediately started to max out my 401k with dollar for dollar matching on first 6%. My 401k allows up to 20% investments in individual stocks and here are my contributions:

2017: $18K + $7K
2018: $18.5K + $14K
2019: $19K + $15K
2020: $19.5K + $15K
2021: $19.5K + $16K
2022: $20.5K + $16.5K
2023: $22.5K + $18K
2024: $23K + $18.5K

Even ignoring gains, I’ve contributed about $280K to my 401k since I started working.

Now let’s talk gains! I was 100% in high growth funds from June 2017 through January 2020. Portfolio was worth $30K at the end of 2017, $65K at the end of 2018, $122K at the end of 2019. Just as COVID hit, I sold out of growth funds and went to stable value, as I knew the market was going to tank. In March 2020 most of our friends were freaking out, but I continued to hold steady and had about $130K. In April 2020, I went all in again on high growth when the market bottomed. Rebalanced my entire portfolio for the second time in just four months.

But the end of 2020, I had $250K! By the end of 2021, this had grown to $369K. Then, again, I knew the market was overvalued, so I rebalanced in December 2021 and went all in on stable value. I held through October 2022. While everyone else was losing value, DH and I were doing well. By the end of 2022 I was up to $410K and had rebalanced once again into a large cap growth heavy portfolio, 20% of which we dumped into NVDA. Today, that 20% has grown to $600K and the other 80% has grown to $510K. And I’ve contributed another $80K on top of all that.

So, yeah, its the end of 2024, 29 yo, I’ve maxed out my 401k, I’ve got a balance of $1.2M, DH has about $1M in his, and we both just rebalanced AGAIN earlier this week. As we’ve predicted correctly in the past, the market is way overvalued and we’re cashing into stable value once again. This time with $2.2M invested. DH says until the S&P 500 hits 3750 and then we’ll be all in again on growth. Probably around October 2025, we think. [/quote]

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