Reply to Tell me how much you have saved in your 401K at age 40.

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[quote=Anonymous][quote=Anonymous][quote=Anonymous]Interesting how in most cases here - the DHs have a lot more than the DWs. Are the DHs earning that much more? Or are the DHs maxing out while the DWs are responsible for additional bills like childcare?[/quote]

My theories would be:

1) Maybe the men get started saving earlier while the women party on in their 20s?
2) Women take time out from work to care for children -- opportunity cost.
3) Yes, salary disparity.

I doubt it's "additional bills."[/quote]

I agree with the items above as the main reason.  In order to have 400K or so in your 401K by age 40 you would have had to start contributing in your early 20s and put in a good amount of money, if not the max contribution, each year.  You also can't contribute to a 401K unless you are working and have income, so SAH moms can't contribute, and you won't be able to contribute much if you are in school or have a low paying job early in your career (non-profit, school teacher, law school student, secretarial type position, etc).  Due to the power of compounding over time, investing early is a huge benefit in the amount of you have in 401K by age 40.

In my case, my wife and I both max out our 401Ks each year, but since she went to law school and I started working immediately after undergrad (tech degree), I had a 3 year head start on her 401K wise and this money advantage just compounds every year even if we invest in the same funds.  That said she makes way more money than I do, so just looking at the 401K balances is pretty misleading.  [/quote]

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