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

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]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?   [/quote]

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.[/quote]

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

Talk to a financial planner. If you are planning to have your kids inherit your 401K and they are in a higher tax bracket than you, you should touch the principal. Ask me how I know.[/quote]

Childfree here. All assets are going 100% to various charities. We will dip into principal for another property or LTC, but don’t need to for everyday expenses/entertainment. Also already have healthcare for life and pension. 50s here and retired. Also, have other liquid assets besides 401k. Life is good.[/quote]

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