Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:How can you be a super saver in a 401k? You can only put in $19,500. That makes for a nice retirement, but it's not 5m in the bank.

its amazing how many people on this board don't understand retirement plans and how they work. Combined contribution (employee + employer) maximums for 2022 are $61,000 (under 50) or $67,500 (over 50). Those limits easily allow for 5M in the bank. Take into account that some of that can be Roth / post tax, and it realizes you even more in retirement.

If you were able, starting at 22, to have access to company resources that allowed for contributions to the full $61k/year (ignoring the fact that it hasn’t been $61k for 20 years), someone at 42 would only have about $1.2 in contributions. It would be nearly impossible to get to $4-5M from that given the limitation on most company sponsored plans. Maybe two people, but even then, how many people have access to plans that allow them to fully max the contribution before 30?

Do you hold 100% of your retirement in cash? or 0% return? In your hypothetical, thats how you end up at 1.2M. assume 7% and you're at 2.5M over the last 10 years the s&p has returned 13.9%.

So I don't know what to tell you. I'm 40. My company matches 100% up to 12% of my salary. I started at ~60k 20 years ago, only hit max contribution last year, most of my part is post tax. I have over 2M (just me) in my retirement account from nothing other than contributions to my company plan. If I keep my contributions at the current level (which I won't, it will go up from here along with the caps) and estimate a conservative 5% return, in 20 more years I will have 6.7M. If returns are what they have been for the last 20 years, I'll have 13.1M

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Pretty sure PPP means they started at a salary of $60k ~20 years ago, since they were expressing contributions as a percentage of income.

Okay. Well, that makes this tall tale of having $2M in an retirement account by the age of 40 even more far fetched.

They said they contributed post-tax. Which doesn't fall into maximums (though I don't know why someone would do it, I guess except for asset protection). Also they have an employer that contributes 100% up to 12% which is a VERY generous match.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:How can you be a super saver in a 401k? You can only put in $19,500. That makes for a nice retirement, but it's not 5m in the bank.

its amazing how many people on this board don't understand retirement plans and how they work. Combined contribution (employee + employer) maximums for 2022 are $61,000 (under 50) or $67,500 (over 50). Those limits easily allow for 5M in the bank. Take into account that some of that can be Roth / post tax, and it realizes you even more in retirement.

I agree. And you're one of them! Let's just run the numbers shall we?!?!

Let's say that OP is 47 years old and has been investing the absolute maximum employee contribution into a 401k for 25 years AND has been receiving the absolute maximum employer contribution for 25 years AND has been maxing out IRA contributions for 25 years. This is EXTREMLY difficult to do, BTW, since most employers come nowhere close to contributing the maximum amount. Let’s not also forget that 25 years ago the max employee, employer, and IRA contributions were $9,500.00, $20,500.00, and $2,000.00, respectively.

Let’s also assume that OP has been earning a very respectable 8% YoY return on all contributions over 25 years. The retirement savings contributions break down as follows:

A = Contribution Year
B = Max 401k Employee Contribution in Year A
C = Max 401k Employer Contribution in Year A
D = Max IRA Contribution in Year A
E = B + C + D in 2022 dollars after YoY compunding since Year A

A | B | C | D | E
1997 | $9,500.00 |$20,500.00 | $2,000.00 | $219,151.21
1998 | $10,000.00 | $20,000.00 | $2,000.00 | $202,917.78
1999 | $10,000.00 | $20,000.00 | $2,000.00 | $187,886.84
2000 | $10,500.00 | $19,500.00 | $2,000.00 | $173,969.29
2001 | $10,500.00 | $24,500.00 | $2,000.00 | $186,251.85
2002 | $11,000.00 | $29,000.00 | $3,000.00 | $200,421.16
2003 | $12,000.00 | $28,000.00 | $3,000.00 | $185,575.15
2004 | $13,000.00 | $28,000.00 | $3,000.00 | $175,824.86
2005 | $14,000.00 | $28,000.00 | $4,000.00 | $170,200.83
2006 | $15,000.00 | $29,000.00 | $4,000.00 | $164,445.25
2007 | $15,500.00 | $29,500.00 | $4,000.00 | $155,436.29
2008 | $15,500.00 | $30,500.00 | $5,000.00 | $149,796.87
2009 | $16,500.00 | $32,500.00 | $5,000.00 | $146,859.68
2010 | $16,500.00 | $32,500.00 | $5,000.00 | $135,981.19
2011 | $16,500.00 | $32,500.00 | $5,000.00 | $125,908.51
2012 | $17,000.00 | $33,000.00 | $5,000.00 | $118,740.87
2013 | $17,500.00 | $33,500.00 | $5,500.00 | $112,943.76
2014 | $17,500.00 | $34,500.00 | $5,500.00 | $106,428.49
2015 | $18,000.00 | $35,000.00 | $5,500.00 | $100,258.72
2016 | $18,000.00 | $35,000.00 | $5,500.00 | $92,832.15
2017 | $18,000.00 | $36,000.00 | $5,500.00 | $87,425.02
2018 | $18,500.00 | $36,500.00 | $5,500.00 | $82,309.58
2019 | $19,000.00 | $37,000.00 | $6,000.00 | $78,102.14
2020 | $19,500.00 | $37,500.00 | $6,000.00 | $73,483.20
2021 | $19,500.00 | $38,500.00 | $6,000.00 | $69,120.00
2022 | $20,500.00 | $40,500.00 | $6,000.00 | $67,000.00
TOTAL = $3,569,270.68

Even with 25 years of maximum savings and very optimistic returns, a single person cannot have anything close to $5M! If OP is only 42, then the first five rows are all zero, which cuts out nearly $1M from what they could have down to more like $$2.6M.

In the more likely scenario that your employer is matching up to 50% of ALL your contributions vs. the federal maximum, the total for a 47 year old becomes only $1.9M. Even doubled for two spouses maxing out for 25 years at this rate isn't even $4M!!!

So, OP, don't believe the so-called outliers on DCUM. You should know that they are outright liars. The math is irrefutable. You're doing great. Stay the course.

One thing your analysis doesn't take into account is the ability some have to do post-tax savings into their 401k. My portion is something like 20% to 25%. Would have to look up to find the exact percentage.

I am strictly buy and hold but someone with good intuitions and conviction to act could have actually done quite well. For example in July 2007, I thought an implosion in the financial sector was coming and mused it was a good time to go all in on governments. (October 2007would have been the ideal time.) In March 2009, my view was we were past the crisis and if I had made that move in 2007, March 2009 would have been a great time to go back all in on equities.

No, you are mistaken. It is true that an employee can contribute beyond the stated employee maximums with after-tax dollars (even with pre-tax dollars into a non-qualified plan, usually with early withdrawal requirements), but these contributions are essentially taken away from the available employer contribution limits such that the total still cannot exceed the limits stated in the tables above. Beyond this, you’re looking at an HSA for retirement, maybe a 529 if you want to take a hit on using it for non-education purposes, or just a taxable brokerage account.

Anonymous wrote:

Anonymous wrote:Pretty sure PPP means they started at a salary of $60k ~20 years ago, since they were expressing contributions as a percentage of income.

Okay. Well, that makes this tall tale of having $2M in an retirement account by the age of 40 even more far fetched.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:How can you be a super saver in a 401k? You can only put in $19,500. That makes for a nice retirement, but it's not 5m in the bank.

its amazing how many people on this board don't understand retirement plans and how they work. Combined contribution (employee + employer) maximums for 2022 are $61,000 (under 50) or $67,500 (over 50). Those limits easily allow for 5M in the bank. Take into account that some of that can be Roth / post tax, and it realizes you even more in retirement.

I agree. And you're one of them! Let's just run the numbers shall we?!?!

Let's say that OP is 47 years old and has been investing the absolute maximum employee contribution into a 401k for 25 years AND has been receiving the absolute maximum employer contribution for 25 years AND has been maxing out IRA contributions for 25 years. This is EXTREMLY difficult to do, BTW, since most employers come nowhere close to contributing the maximum amount. Let’s not also forget that 25 years ago the max employee, employer, and IRA contributions were $9,500.00, $20,500.00, and $2,000.00, respectively.

Let’s also assume that OP has been earning a very respectable 8% YoY return on all contributions over 25 years. The retirement savings contributions break down as follows:

A = Contribution Year
B = Max 401k Employee Contribution in Year A
C = Max 401k Employer Contribution in Year A
D = Max IRA Contribution in Year A
E = B + C + D in 2022 dollars after YoY compunding since Year A

A | B | C | D | E
1997 | $9,500.00 |$20,500.00 | $2,000.00 | $219,151.21
1998 | $10,000.00 | $20,000.00 | $2,000.00 | $202,917.78
1999 | $10,000.00 | $20,000.00 | $2,000.00 | $187,886.84
2000 | $10,500.00 | $19,500.00 | $2,000.00 | $173,969.29
2001 | $10,500.00 | $24,500.00 | $2,000.00 | $186,251.85
2002 | $11,000.00 | $29,000.00 | $3,000.00 | $200,421.16
2003 | $12,000.00 | $28,000.00 | $3,000.00 | $185,575.15
2004 | $13,000.00 | $28,000.00 | $3,000.00 | $175,824.86
2005 | $14,000.00 | $28,000.00 | $4,000.00 | $170,200.83
2006 | $15,000.00 | $29,000.00 | $4,000.00 | $164,445.25
2007 | $15,500.00 | $29,500.00 | $4,000.00 | $155,436.29
2008 | $15,500.00 | $30,500.00 | $5,000.00 | $149,796.87
2009 | $16,500.00 | $32,500.00 | $5,000.00 | $146,859.68
2010 | $16,500.00 | $32,500.00 | $5,000.00 | $135,981.19
2011 | $16,500.00 | $32,500.00 | $5,000.00 | $125,908.51
2012 | $17,000.00 | $33,000.00 | $5,000.00 | $118,740.87
2013 | $17,500.00 | $33,500.00 | $5,500.00 | $112,943.76
2014 | $17,500.00 | $34,500.00 | $5,500.00 | $106,428.49
2015 | $18,000.00 | $35,000.00 | $5,500.00 | $100,258.72
2016 | $18,000.00 | $35,000.00 | $5,500.00 | $92,832.15
2017 | $18,000.00 | $36,000.00 | $5,500.00 | $87,425.02
2018 | $18,500.00 | $36,500.00 | $5,500.00 | $82,309.58
2019 | $19,000.00 | $37,000.00 | $6,000.00 | $78,102.14
2020 | $19,500.00 | $37,500.00 | $6,000.00 | $73,483.20
2021 | $19,500.00 | $38,500.00 | $6,000.00 | $69,120.00
2022 | $20,500.00 | $40,500.00 | $6,000.00 | $67,000.00
TOTAL = $3,569,270.68

Even with 25 years of maximum savings and very optimistic returns, a single person cannot have anything close to $5M! If OP is only 42, then the first five rows are all zero, which cuts out nearly $1M from what they could have down to more like $$2.6M.

In the more likely scenario that your employer is matching up to 50% of ALL your contributions vs. the federal maximum, the total for a 47 year old becomes only $1.9M. Even doubled for two spouses maxing out for 25 years at this rate isn't even $4M!!!

So, OP, don't believe the so-called outliers on DCUM. You should know that they are outright liars. The math is irrefutable. You're doing great. Stay the course.

One thing your analysis doesn't take into account is the ability some have to do post-tax savings into their 401k. My portion is something like 20% to 25%. Would have to look up to find the exact percentage.

I am strictly buy and hold but someone with good intuitions and conviction to act could have actually done quite well. For example in July 2007, I thought an implosion in the financial sector was coming and mused it was a good time to go all in on governments. (October 2007would have been the ideal time.) In March 2009, my view was we were past the crisis and if I had made that move in 2007, March 2009 would have been a great time to go back all in on equities.

Anonymous wrote:How can you be a super saver in a 401k? You can only put in $19,500. That makes for a nice retirement, but it's not 5m in the bank.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:How can you be a super saver in a 401k? You can only put in $19,500. That makes for a nice retirement, but it's not 5m in the bank.

its amazing how many people on this board don't understand retirement plans and how they work. Combined contribution (employee + employer) maximums for 2022 are $61,000 (under 50) or $67,500 (over 50). Those limits easily allow for 5M in the bank. Take into account that some of that can be Roth / post tax, and it realizes you even more in retirement.

I agree. And you're one of them! Let's just run the numbers shall we?!?!

Let's say that OP is 47 years old and has been investing the absolute maximum employee contribution into a 401k for 25 years AND has been receiving the absolute maximum employer contribution for 25 years AND has been maxing out IRA contributions for 25 years. This is EXTREMLY difficult to do, BTW, since most employers come nowhere close to contributing the maximum amount. Let’s not also forget that 25 years ago the max employee, employer, and IRA contributions were $9,500.00, $20,500.00, and $2,000.00, respectively.

Let’s also assume that OP has been earning a very respectable 8% YoY return on all contributions over 25 years. The retirement savings contributions break down as follows:

A = Contribution Year
B = Max 401k Employee Contribution in Year A
C = Max 401k Employer Contribution in Year A
D = Max IRA Contribution in Year A
E = B + C + D in 2022 dollars after YoY compunding since Year A

A | B | C | D | E
1997 | $9,500.00 |$20,500.00 | $2,000.00 | $219,151.21
1998 | $10,000.00 | $20,000.00 | $2,000.00 | $202,917.78
1999 | $10,000.00 | $20,000.00 | $2,000.00 | $187,886.84
2000 | $10,500.00 | $19,500.00 | $2,000.00 | $173,969.29
2001 | $10,500.00 | $24,500.00 | $2,000.00 | $186,251.85
2002 | $11,000.00 | $29,000.00 | $3,000.00 | $200,421.16
2003 | $12,000.00 | $28,000.00 | $3,000.00 | $185,575.15
2004 | $13,000.00 | $28,000.00 | $3,000.00 | $175,824.86
2005 | $14,000.00 | $28,000.00 | $4,000.00 | $170,200.83
2006 | $15,000.00 | $29,000.00 | $4,000.00 | $164,445.25
2007 | $15,500.00 | $29,500.00 | $4,000.00 | $155,436.29
2008 | $15,500.00 | $30,500.00 | $5,000.00 | $149,796.87
2009 | $16,500.00 | $32,500.00 | $5,000.00 | $146,859.68
2010 | $16,500.00 | $32,500.00 | $5,000.00 | $135,981.19
2011 | $16,500.00 | $32,500.00 | $5,000.00 | $125,908.51
2012 | $17,000.00 | $33,000.00 | $5,000.00 | $118,740.87
2013 | $17,500.00 | $33,500.00 | $5,500.00 | $112,943.76
2014 | $17,500.00 | $34,500.00 | $5,500.00 | $106,428.49
2015 | $18,000.00 | $35,000.00 | $5,500.00 | $100,258.72
2016 | $18,000.00 | $35,000.00 | $5,500.00 | $92,832.15
2017 | $18,000.00 | $36,000.00 | $5,500.00 | $87,425.02
2018 | $18,500.00 | $36,500.00 | $5,500.00 | $82,309.58
2019 | $19,000.00 | $37,000.00 | $6,000.00 | $78,102.14
2020 | $19,500.00 | $37,500.00 | $6,000.00 | $73,483.20
2021 | $19,500.00 | $38,500.00 | $6,000.00 | $69,120.00
2022 | $20,500.00 | $40,500.00 | $6,000.00 | $67,000.00
TOTAL = $3,569,270.68

Even with 25 years of maximum savings and very optimistic returns, a single person cannot have anything close to $5M! If OP is only 42, then the first five rows are all zero, which cuts out nearly $1M from what they could have down to more like $$2.6M.

In the more likely scenario that your employer is matching up to 50% of ALL your contributions vs. the federal maximum, the total for a 47 year old becomes only $1.9M. Even doubled for two spouses maxing out for 25 years at this rate isn't even $4M!!!

So, OP, don't believe the so-called outliers on DCUM. You should know that they are outright liars. The math is irrefutable. You're doing great. Stay the course.

Anonymous wrote:Pretty sure PPP means they started at a salary of $60k ~20 years ago, since they were expressing contributions as a percentage of income.

Anonymous wrote:

Anonymous wrote:Do you hold 100% of your retirement in cash? or 0% return? In your hypothetical, thats how you end up at 1.2M. assume 7% and you're at 2.5M over the last 10 years the s&p has returned 13.9%.

So I don't know what to tell you. I'm 40. My company matches 100% up to 12% of my salary. I started at ~60k 20 years ago, only hit max contribution last year, most of my part is post tax. I have over 2M (just me) in my retirement account from nothing other than contributions to my company plan. If I keep my contributions at the current level (which I won't, it will go up from here along with the caps) and estimate a conservative 5% return, in 20 more years I will have 6.7M. If returns are what they have been for the last 20 years, I'll have 13.1M

Uhhh...nice try. Thanks to a PP, we know that the 401k contribution limits 20 years ago were $11K + $29K = $40K. How did you start at $60K 20 years ago?!?!

2002 | $11,000.00 | $29,000.00 | $3,000.00 | $200,421.16

Anonymous wrote:Do you hold 100% of your retirement in cash? or 0% return? In your hypothetical, thats how you end up at 1.2M. assume 7% and you're at 2.5M over the last 10 years the s&p has returned 13.9%.

So I don't know what to tell you. I'm 40. My company matches 100% up to 12% of my salary. I started at ~60k 20 years ago, only hit max contribution last year, most of my part is post tax. I have over 2M (just me) in my retirement account from nothing other than contributions to my company plan. If I keep my contributions at the current level (which I won't, it will go up from here along with the caps) and estimate a conservative 5% return, in 20 more years I will have 6.7M. If returns are what they have been for the last 20 years, I'll have 13.1M

Anonymous wrote:Do you hold 100% of your retirement in cash? or 0% return? In your hypothetical, thats how you end up at 1.2M. assume 7% and you're at 2.5M over the last 10 years the s&p has returned 13.9%.

So I don't know what to tell you. I'm 40. My company matches 100% up to 12% of my salary. I started at ~60k 20 years ago, only hit max contribution last year, most of my part is post tax. I have over 2M (just me) in my retirement account from nothing other than contributions to my company plan. If I keep my contributions at the current level (which I won't, it will go up from here along with the caps) and estimate a conservative 5% return, in 20 more years I will have 6.7M. If returns are what they have been for the last 20 years, I'll have 13.1M

Anonymous wrote:

Anonymous wrote:How can you be a super saver in a 401k? You can only put in $19,500. That makes for a nice retirement, but it's not 5m in the bank.

its amazing how many people on this board don't understand retirement plans and how they work. Combined contribution (employee + employer) maximums for 2022 are $61,000 (under 50) or $67,500 (over 50). Those limits easily allow for 5M in the bank. Take into account that some of that can be Roth / post tax, and it realizes you even more in retirement.