Reply to Why max out 401k?

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]I am in my mid-40 and currently save 10% of my salary towards 401k. My salary is 120k and have ~500k so far. I know these are small numbers compared to what most people post on this board but not bad realistically!

When I run a retirement calculator, it seems like I am on track for retirement and, including SS, I will have around 9k in monthly income. That sounds good to me. I don’t know how accurate the calculator I used is but, supposed it is, if I am on track, why would I want to max out my retirement savings? to have more money when I am old?

I have 2 children, but somehow the thought of a bigger inheritance to them doesn’t feel like a great motivation. I would rather enjoy my time with them now than passing them on money after I am dead! My husband also has his own fund with approximately the same balance and contribution. 
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Curious the numbers you used to get to 9k income. If you retire at 62, you'll get maybe 2500 in SS pretax. To get to 9k monthly, (and this is still pretax), you would need to have 2.6m in your 401k to get the remainder (6500) from four 401k. You aren't getting to 2.6 in 20 years if you are currently at 500k. [/quote]

Compound interest would get her almost exactly to 2.6M in 20 years.[/quote]

Exactly. don't know why people were questioning this.[/quote]

Math is hard.  They probably aren't factoring in future contributions, matches and raises. [/quote]

And you are not factoring in inflation and market corrections. Losers have been staggering in the last 2 years. Go ask a retiree. [/quote]

That has zero to do with the question of how does $500k + 10% of income + company match + 20 years compounded interest get someone to
$2.6M. Also, most people use 6% as the average rate over time and that takes into account market corrections.

You are correct that what people cannot do is treat $2.6M in future dollars as equal to $2.6M in today’s dollars due to inflation (I was the poster that previously pointed that out). But that had nothing to do with the actual math involved in determining what $500K will equal in the future based on a certain set of assumptions.

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6% is VERY generous.[/quote]

Sheesh, there are some crazy people on this forum. 6% is not very generous. You have no idea what you are talking about. You can get a 2yr treasury paying nearly 4% right now. Do you really think the risk premium in stocks will be less than 2% of risk free assets?[/quote]

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