Reply to How much should be in 401k at age 40?

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]We hit 1M at around 38. Keep saving![/quote]

It’s hard to make the math work on this brag.[/quote]

Disagree. It’s definitely possible to hit $1M at 38. If they each contributed the max yearly to their 401Ks and invested wisely or were lucky or both then I’d say they actually are not doing that well.[/quote]

You can disagree all you want, but even maxing out and a generous company match for 16 years straight you’d need to outperform the S&P for each of those years with a 10% per year gain to the S&P’s 6% per year over that period.  That sort of performance is exceedingly unlikely which is why it’s hard to make the math work.  Outperforming the gains of the S&P by 67% (10% vs 6%) on average in your 401k for 16 years straight would really be something.

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I’m a fed so I have a tsp versus 401 k but I had a similar rapid upward investment trajectory with a basic portfolio (fully invested in stocks) in recent years and I’m pretty sure the returns potential for a 401k were comparable, with just a fraction of a percentage higher in fees.

The 1 year return on the Tsp’s most popular “C fund” (which mirrors the S&P) was 29.7%, the 5 year average return 14.6 and the 10 year average 12.63…all clearly documented on the tsp website. So given the actual data from the last 10 years (exponentially beyond the average gains you are citing) it definitely is feasible.

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