My 401k is 100% FXAIX
millionaires
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Last: 1 mo ago by jamey
Red Pear Realty said:
My whole point from the beginning was that you cannot rely on a 401k to make you wealthy. You have to invest via other means. With the stats above, even assuming every American has 4-5 accounts with that average balance, the average person will be living below the poverty line.
Already been shown multiple times on this thread that this is untrue.
The funniest thing is he talks about starting a business like it's a clear path to wealth for everyone and they never ever fail as long as you work hard.
It sounds incredibly naive.
It sounds incredibly naive.
Red Pear Realty said:
I cherry picked? The article headline talks about average 401k millionaires and balances being up YOY.
There's a reason the article doesn't mention median numbers. 401k millionaires are the unicorns. This argument is like encouraging people to play the lottery because someone won big one time. It's not realistic.
And to be exact, the article says 401k balances are up 14% YOY. Meanwhile the S&P is up 24%. And we've established that employers offer these accounts out of benevolence so they are doing some generous matching, right? With their match, they barely returned half of the S&P. Looks like contributors lost again.
This article is bread and circuses.
I'm not surprised the average person's 401k balance didn't match the S&P. The average person doesn't actively manage their accounts, but that's not really the point.
Your position is that you can't get rich from a 401k, and I'd say that's incorrect. Like anything else, it requires the investor to stay active and make good decisions. For instance, for me, my employer matches 200% of the first 5% of my salary I contribute. Where else can you receive an instant 200% gain on your money? Perhaps I am more of a unicorn, because there aren't a ton of employers that have a 200% match. But, you know what? The majority of small businesses fail also. That means a successful business that makes you a millionaire could also be considered a unicorn.
I don't think he is too far off actually.Brian Earl Spilner said:Red Pear Realty said:
My whole point from the beginning was that you cannot rely on a 401k to make you wealthy. You have to invest via other means. With the stats above, even assuming every American has 4-5 accounts with that average balance, the average person will be living below the poverty line.
Already been shown multiple times on this thread that this is untrue.
If a 401k is your only means of saving/investing you aren't getting outsized returns. You may get to $1MM may even get to $2Mm but you aren't getting to $4, 5, or 10MM.
For some people, getting to $4, $5, or $10MM isn't necessary.
My whole goal is to retire somewhere between age 55-59 and not HAVE to work full-time, if I don't want to.
In order to have enough money to do this, I will be wealthy. But I will not be living a "wealthy" lifestyle; I will effectively be living on a fixed income (albeit a middle class level fixed income). I don't live one now, though, so "being wealthy" isn't a factor for me.
My goal is to spend the money that I save. If there is some left to leave for my son, great, but my goals have never been to build "generational wealth". My goal is to save enough to not have to work until I die.
If someone's goals are similar to mine, then investing in your 401k, Roth IRA, and HSA are all fantastic ways to meet them.
I know there were missed opportunities along the way, particularly in real estate, but I absolutely do not want the responsibility of being a landlord. Didn't want it before, don't want it now, and am pretty sure I won't want it when I retire.
I do regret not buying Ford back in 2008 when it was $1.34/share. But as a 30 year old single mom with a 4 year old and a 403b that was worth less than my contributions, I wasn't ready for that risk.
Many of us, despite our best efforts, have spent significant time and effort just managing the curve balls life has thrown at us. I'm on career number three after reinventing nearly my whole life twice. I left academia after six colleagues were shot (three killed) by another colleague only to land at a start-up company that was bankrupt just two years later.
Corporate America has actually provided a lot of stability for me. At some point, you just want to make the most of what really is a good opportunity (even if it means being a corporate cube-dweller).
My whole goal is to retire somewhere between age 55-59 and not HAVE to work full-time, if I don't want to.
In order to have enough money to do this, I will be wealthy. But I will not be living a "wealthy" lifestyle; I will effectively be living on a fixed income (albeit a middle class level fixed income). I don't live one now, though, so "being wealthy" isn't a factor for me.
My goal is to spend the money that I save. If there is some left to leave for my son, great, but my goals have never been to build "generational wealth". My goal is to save enough to not have to work until I die.
If someone's goals are similar to mine, then investing in your 401k, Roth IRA, and HSA are all fantastic ways to meet them.
I know there were missed opportunities along the way, particularly in real estate, but I absolutely do not want the responsibility of being a landlord. Didn't want it before, don't want it now, and am pretty sure I won't want it when I retire.
I do regret not buying Ford back in 2008 when it was $1.34/share. But as a 30 year old single mom with a 4 year old and a 403b that was worth less than my contributions, I wasn't ready for that risk.
Many of us, despite our best efforts, have spent significant time and effort just managing the curve balls life has thrown at us. I'm on career number three after reinventing nearly my whole life twice. I left academia after six colleagues were shot (three killed) by another colleague only to land at a start-up company that was bankrupt just two years later.
Corporate America has actually provided a lot of stability for me. At some point, you just want to make the most of what really is a good opportunity (even if it means being a corporate cube-dweller).
Ragoo said:I don't think he is too far off actually.Brian Earl Spilner said:Red Pear Realty said:
My whole point from the beginning was that you cannot rely on a 401k to make you wealthy. You have to invest via other means. With the stats above, even assuming every American has 4-5 accounts with that average balance, the average person will be living below the poverty line.
Already been shown multiple times on this thread that this is untrue.
If a 401k is your only means of saving/investing you aren't getting outsized returns. You may get to $1MM may even get to $2Mm but you aren't getting to $4, 5, or 10MM.
The Knight wealth report coming out next week says that only the top 1% get to $5.8mm or more so for most people, they will never get there in today's dollars because they will never have the income to save that much. Also, the 401k isn't the only means of generating wealth to any American and no one I can recall has said that on this board.
I think most people on this board can get a 401k to over $1mm if they start when they get out of school and contribute every year until they retire. To get to the wealth you are talking about, they will most likely need to either save a lot in brokerage accounts outside the 401k, inherit it, make some investments that get outsized returns such as in a business or real estate, or some combination of items like that.
I agree with your post completely. I have no interest in generational wealth. In fact, my girls pay for their own college because I have instilled in them that their life quality is completely dependent on them making good decisions. We do pick up groceries and apartment rent, but they're on the hook for books and tuition. We have the means to pay for much more than we do, but I want me children to be appreciative for what they have and expect nothing.
I have Type 1 diabetes. For a long time the only way I could get insured was through a corporate policy. I'm destined to be a cube dweller and May have to work longer than what I otherwise would due to the insurance costs. I figure to insure just me outside of a corporate insurance plan, I'm looking at at least $30,000/year. Today I pay about $35/month for me and my whole family. Even if I had a fantastic business idea, the insurance issue would make it very difficult for me to take too many chances.
I want enough wealth to be comfortable and not have to worry. More than that, it will just get left behind.
I have Type 1 diabetes. For a long time the only way I could get insured was through a corporate policy. I'm destined to be a cube dweller and May have to work longer than what I otherwise would due to the insurance costs. I figure to insure just me outside of a corporate insurance plan, I'm looking at at least $30,000/year. Today I pay about $35/month for me and my whole family. Even if I had a fantastic business idea, the insurance issue would make it very difficult for me to take too many chances.
I want enough wealth to be comfortable and not have to worry. More than that, it will just get left behind.
Ragoo said:I don't think he is too far off actually.Brian Earl Spilner said:Red Pear Realty said:
My whole point from the beginning was that you cannot rely on a 401k to make you wealthy. You have to invest via other means. With the stats above, even assuming every American has 4-5 accounts with that average balance, the average person will be living below the poverty line.
Already been shown multiple times on this thread that this is untrue.
If a 401k is your only means of saving/investing you aren't getting outsized returns. You may get to $1MM may even get to $2Mm but you aren't getting to $4, 5, or 10MM.
Yes, you can. Between my wife and I, our 401ks, company match, and backdoor Roths, we can have several million in retirement accounts by retirement age (assuming the market continues its same average returns over next 20+ years).
your backdoor roth isn't your 401k. You can direct invest it and have the possibility of a greater return. Which is why I was specific to say only a 401k.txaggie_08 said:Ragoo said:I don't think he is too far off actually.Brian Earl Spilner said:Red Pear Realty said:
My whole point from the beginning was that you cannot rely on a 401k to make you wealthy. You have to invest via other means. With the stats above, even assuming every American has 4-5 accounts with that average balance, the average person will be living below the poverty line.
Already been shown multiple times on this thread that this is untrue.
If a 401k is your only means of saving/investing you aren't getting outsized returns. You may get to $1MM may even get to $2Mm but you aren't getting to $4, 5, or 10MM.
Yes, you can. Between my wife and I, our 401ks, company match, and backdoor Roths, we can have several million in retirement accounts by retirement age (assuming the market continues its same average returns over next 20+ years).
Edit to add: your typical corporate sponsored 401k at best is tracking the S&P and could be doing worse. It is a consistent slow build to a number that should be considered a portion of your retirement picture.
This thread is great entertainment!
Basically, if you don't do it my way you're wrong. Now can we get back to boasting about our net worths?
Ragoo said:your backdoor roth isn't your 401k. You can direct invest it and have the possibility of a greater return. Which is why I was specific to say only a 401k.txaggie_08 said:Ragoo said:I don't think he is too far off actually.Brian Earl Spilner said:Red Pear Realty said:
My whole point from the beginning was that you cannot rely on a 401k to make you wealthy. You have to invest via other means. With the stats above, even assuming every American has 4-5 accounts with that average balance, the average person will be living below the poverty line.
Already been shown multiple times on this thread that this is untrue.
If a 401k is your only means of saving/investing you aren't getting outsized returns. You may get to $1MM may even get to $2Mm but you aren't getting to $4, 5, or 10MM.
Yes, you can. Between my wife and I, our 401ks, company match, and backdoor Roths, we can have several million in retirement accounts by retirement age (assuming the market continues its same average returns over next 20+ years).
Edit to add: your typical corporate sponsored 401k at best is tracking the S&P and could be doing worse. It is a consistent slow build to a number that should be considered a portion of your retirement picture.
My Roth Contribution is maxed at $7k this year, obviously less every year prior. You're not going to get rich off the Roth IRA.
My 401k has over half a million in it, by itself, and I've been investing in it for about 13 years now. I have 20+ years until retirement. Most of that half million in 401k were under smaller salaries when I wasn't maxing out contributions. But now I'm at a point where I can max out my 401k, plus the compounding interest on the current balance plus future contributions will make this account grow MUCH faster. I will have several million in that 401k by the time I reach retirement, not even counting my wife's 401k and our IRAs. We also have an HSA we're maxing out now with add'l company match. Several different retirement account options to build wealth, but my main point is my 401k alone should build more than enough wealth on its own.
lol
Only if you accept my way that this is the land of opportunity and there are a myriad of ways to become wealthy.
Only if you accept my way that this is the land of opportunity and there are a myriad of ways to become wealthy.
you are missing the point entirely. Even at $7000 per year or $6500 or less in years past you can invest in stocks that can give you a return much greater than the 401k. If you had put your Roth in apple alone 13 years ago that account would rival the 401k today.txaggie_08 said:Ragoo said:your backdoor roth isn't your 401k. You can direct invest it and have the possibility of a greater return. Which is why I was specific to say only a 401k.txaggie_08 said:Ragoo said:I don't think he is too far off actually.Brian Earl Spilner said:Red Pear Realty said:
My whole point from the beginning was that you cannot rely on a 401k to make you wealthy. You have to invest via other means. With the stats above, even assuming every American has 4-5 accounts with that average balance, the average person will be living below the poverty line.
Already been shown multiple times on this thread that this is untrue.
If a 401k is your only means of saving/investing you aren't getting outsized returns. You may get to $1MM may even get to $2Mm but you aren't getting to $4, 5, or 10MM.
Yes, you can. Between my wife and I, our 401ks, company match, and backdoor Roths, we can have several million in retirement accounts by retirement age (assuming the market continues its same average returns over next 20+ years).
Edit to add: your typical corporate sponsored 401k at best is tracking the S&P and could be doing worse. It is a consistent slow build to a number that should be considered a portion of your retirement picture.
My Roth Contribution is maxed at $7k this year, obviously less every year prior. You're not going to get rich off the Roth IRA.
My 401k has over half a million in it, by itself, and I've been investing in it for about 13 years now. I have 20+ years until retirement. Most of that half million in 401k were under smaller salaries when I wasn't maxing out contributions. But now I'm at a point where I can max out my 401k, plus the compounding interest on the current balance plus future contributions will make this account grow MUCH faster. I will have several million in that 401k by the time I reach retirement, not even counting my wife's 401k and our IRAs. We also have an HSA we're maxing out now with add'l company match. Several different retirement account options to build wealth, but my main point is my 401k alone should build more than enough wealth on its own.
The point is that your wealth and retirement should consist of a blend of avenues. 401k, Roth, hsa, brokerage, even real estate or others if your path allows.
I am not saying what people should or shouldn't do. Simply pointing out that the comment was made that a 401k is a path to wealth but at best it is a path to pacing with the market.
txaggie_08 said:Ragoo said:your backdoor roth isn't your 401k. You can direct invest it and have the possibility of a greater return. Which is why I was specific to say only a 401k.txaggie_08 said:Ragoo said:I don't think he is too far off actually.Brian Earl Spilner said:Red Pear Realty said:
My whole point from the beginning was that you cannot rely on a 401k to make you wealthy. You have to invest via other means. With the stats above, even assuming every American has 4-5 accounts with that average balance, the average person will be living below the poverty line.
Already been shown multiple times on this thread that this is untrue.
If a 401k is your only means of saving/investing you aren't getting outsized returns. You may get to $1MM may even get to $2Mm but you aren't getting to $4, 5, or 10MM.
Yes, you can. Between my wife and I, our 401ks, company match, and backdoor Roths, we can have several million in retirement accounts by retirement age (assuming the market continues its same average returns over next 20+ years).
Edit to add: your typical corporate sponsored 401k at best is tracking the S&P and could be doing worse. It is a consistent slow build to a number that should be considered a portion of your retirement picture.
My Roth Contribution is maxed at $7k this year, obviously less every year prior. You're not going to get rich off the Roth IRA.
My 401k has over half a million in it, by itself, and I've been investing in it for about 13 years now. I have 20+ years until retirement. Most of that half million in 401k were under smaller salaries when I wasn't maxing out contributions. But now I'm at a point where I can max out my 401k, plus the compounding interest on the current balance plus future contributions will make this account grow MUCH faster. I will have several million in that 401k by the time I reach retirement, not even counting my wife's 401k and our IRAs. We also have an HSA we're maxing out now with add'l company match. Several different retirement account options to build wealth, but my main point is my 401k alone should build more than enough wealth on its own.
You can put up to an additional $46k of after tax dollars per year in a mega backdoor Roth, after you've maxed out your regular 401k. You have to have a 401k that allows in-service distributions, and you may or may not be able to selectively invest the extra contributions (I cannot - they are invested the same as my 401k).
But your options for Roth are much greater than $7k/year.
Ragoo said:you are missing the point entirely. Even at $7000 per year or $6500 or less in years past you can invest in stocks that can give you a return much greater than the 401k. If you had put your Roth in apple alone 13 years ago that account would rival the 401k today.txaggie_08 said:Ragoo said:your backdoor roth isn't your 401k. You can direct invest it and have the possibility of a greater return. Which is why I was specific to say only a 401k.txaggie_08 said:Ragoo said:I don't think he is too far off actually.Brian Earl Spilner said:Red Pear Realty said:
My whole point from the beginning was that you cannot rely on a 401k to make you wealthy. You have to invest via other means. With the stats above, even assuming every American has 4-5 accounts with that average balance, the average person will be living below the poverty line.
Already been shown multiple times on this thread that this is untrue.
If a 401k is your only means of saving/investing you aren't getting outsized returns. You may get to $1MM may even get to $2Mm but you aren't getting to $4, 5, or 10MM.
Yes, you can. Between my wife and I, our 401ks, company match, and backdoor Roths, we can have several million in retirement accounts by retirement age (assuming the market continues its same average returns over next 20+ years).
Edit to add: your typical corporate sponsored 401k at best is tracking the S&P and could be doing worse. It is a consistent slow build to a number that should be considered a portion of your retirement picture.
My Roth Contribution is maxed at $7k this year, obviously less every year prior. You're not going to get rich off the Roth IRA.
My 401k has over half a million in it, by itself, and I've been investing in it for about 13 years now. I have 20+ years until retirement. Most of that half million in 401k were under smaller salaries when I wasn't maxing out contributions. But now I'm at a point where I can max out my 401k, plus the compounding interest on the current balance plus future contributions will make this account grow MUCH faster. I will have several million in that 401k by the time I reach retirement, not even counting my wife's 401k and our IRAs. We also have an HSA we're maxing out now with add'l company match. Several different retirement account options to build wealth, but my main point is my 401k alone should build more than enough wealth on its own.
The point is that your wealth and retirement should consist of a blend of avenues. 401k, Roth, hsa, brokerage, even real estate or others if your path allows.
I am not saying what people should or shouldn't do. Simply pointing out that the comment was made that a 401k is a path to wealth but at best it is a path to pacing with the market.
I think I see one big difference here causing a lot of the difference of opinions. A lot of us have 401Ks with the option to invest some or all in a brokerage account we control so we can invest in almost any public security (exception being something like MLPs which aren't good in tax deferred accounts because of UBTI). With that, we can achieve better returns than in a brokerage account because of tax deferrals.
Ragoo said:you are missing the point entirely. Even at $7000 per year or $6500 or less in years past you can invest in stocks that can give you a return much greater than the 401k. If you had put your Roth in apple alone 13 years ago that account would rival the 401k today.txaggie_08 said:Ragoo said:your backdoor roth isn't your 401k. You can direct invest it and have the possibility of a greater return. Which is why I was specific to say only a 401k.txaggie_08 said:Ragoo said:I don't think he is too far off actually.Brian Earl Spilner said:Red Pear Realty said:
My whole point from the beginning was that you cannot rely on a 401k to make you wealthy. You have to invest via other means. With the stats above, even assuming every American has 4-5 accounts with that average balance, the average person will be living below the poverty line.
Already been shown multiple times on this thread that this is untrue.
If a 401k is your only means of saving/investing you aren't getting outsized returns. You may get to $1MM may even get to $2Mm but you aren't getting to $4, 5, or 10MM.
Yes, you can. Between my wife and I, our 401ks, company match, and backdoor Roths, we can have several million in retirement accounts by retirement age (assuming the market continues its same average returns over next 20+ years).
Edit to add: your typical corporate sponsored 401k at best is tracking the S&P and could be doing worse. It is a consistent slow build to a number that should be considered a portion of your retirement picture.
My Roth Contribution is maxed at $7k this year, obviously less every year prior. You're not going to get rich off the Roth IRA.
My 401k has over half a million in it, by itself, and I've been investing in it for about 13 years now. I have 20+ years until retirement. Most of that half million in 401k were under smaller salaries when I wasn't maxing out contributions. But now I'm at a point where I can max out my 401k, plus the compounding interest on the current balance plus future contributions will make this account grow MUCH faster. I will have several million in that 401k by the time I reach retirement, not even counting my wife's 401k and our IRAs. We also have an HSA we're maxing out now with add'l company match. Several different retirement account options to build wealth, but my main point is my 401k alone should build more than enough wealth on its own.
The point is that your wealth and retirement should consist of a blend of avenues. 401k, Roth, hsa, brokerage, even real estate or others if your path allows.
I am not saying what people should or shouldn't do. Simply pointing out that the comment was made that a 401k is a path to wealth but at best it is a path to pacing with the market.
I'm not missing the point. I'm showing you concrete evidence that a 401k can lead to wealth. Someone with several million in an account is wealthy. This thread is about "millionaires" after all.
Now, I agree that your wealth should consist of a blend of different wealth generators because although the market has delivered an average annual return of about 10% that's not guaranteed in the future. All of our money is not tied up in retirement accounts, either. But the point was brought up that 401ks can't build wealth, and I'm showing that's not necessarily true. Maybe some people are hamstrung by investment options. Sucks for them, maybe they need to work with their employer to broaden those options. In my case, I'm not really (other than I can't contribute to any one individual stock). I have several options I can choose to invest in, one being a straight S&P 500 index.
MAS444 said:
Basically, if you don't do it my way you're wrong. Now can we get back to boasting about our net worths?
Seems like a good time to remind everyone of the $5M minimum net worth requirement that allows one to post here.
All of the 401k riff raff can exit this thread now so the rest of us can discuss real wealth.
Thanks for your compliance.
TXTransplant said:txaggie_08 said:Ragoo said:your backdoor roth isn't your 401k. You can direct invest it and have the possibility of a greater return. Which is why I was specific to say only a 401k.txaggie_08 said:Ragoo said:I don't think he is too far off actually.Brian Earl Spilner said:Red Pear Realty said:
My whole point from the beginning was that you cannot rely on a 401k to make you wealthy. You have to invest via other means. With the stats above, even assuming every American has 4-5 accounts with that average balance, the average person will be living below the poverty line.
Already been shown multiple times on this thread that this is untrue.
If a 401k is your only means of saving/investing you aren't getting outsized returns. You may get to $1MM may even get to $2Mm but you aren't getting to $4, 5, or 10MM.
Yes, you can. Between my wife and I, our 401ks, company match, and backdoor Roths, we can have several million in retirement accounts by retirement age (assuming the market continues its same average returns over next 20+ years).
Edit to add: your typical corporate sponsored 401k at best is tracking the S&P and could be doing worse. It is a consistent slow build to a number that should be considered a portion of your retirement picture.
My Roth Contribution is maxed at $7k this year, obviously less every year prior. You're not going to get rich off the Roth IRA.
My 401k has over half a million in it, by itself, and I've been investing in it for about 13 years now. I have 20+ years until retirement. Most of that half million in 401k were under smaller salaries when I wasn't maxing out contributions. But now I'm at a point where I can max out my 401k, plus the compounding interest on the current balance plus future contributions will make this account grow MUCH faster. I will have several million in that 401k by the time I reach retirement, not even counting my wife's 401k and our IRAs. We also have an HSA we're maxing out now with add'l company match. Several different retirement account options to build wealth, but my main point is my 401k alone should build more than enough wealth on its own.
You can put up to an additional $46k of after tax dollars per year in a mega backdoor Roth, after you've maxed out your regular 401k. You have to have a 401k that allows in-service distributions, and you may or may not be able to selectively invest the extra contributions (I cannot - they are invested the same as my 401k).
But your options for Roth are much greater than $7k/year.
Yes, I've inquired about the mega backdoor Roth with my provider, but it's not an option. Not necessarily a big deal to me though, as with some of those investment dollars I'd like them to be in an after tax account that isn't hamstrung by certain distribution requirements (understanding that a Roth is pretty flexible). So, with pre-tax 401k (plus some Roth 401k contributions), the Roth IRA, and a brokerage account, I have all 3 bases covered.
My company's "401k" is a profit sharing plan and they contribute 15%. I can't contribute anything, so not a true 401k, but same thing.
Had I worked here since I was 25 or so, It would be $2m+ by the time I retire. My first contribution was 37 years old however;
I plan to retire at 60 and it will be ~$1.5m.
Is that not wealth?
Had I worked here since I was 25 or so, It would be $2m+ by the time I retire. My first contribution was 37 years old however;
I plan to retire at 60 and it will be ~$1.5m.
Is that not wealth?
Why you gotta slam the door in my face like that?
62strat said:
My company's "401k" is a profit sharing plan and they contribute 15%. I can't contribute anything, so not a true 401k, but same thing.
Had I worked here since I was 25 or so, It would be $2m+ by the time I retire. My first contribution was 37 years old however;
I plan to retire at 60 and it will be ~$1.5m.
Is that not wealth?
Not wealth you schmuck, now get outta here!!
Business or real estate wealth only up in here!!
Or cash that you throw down on individual stocks. Bet the farm on AAPL, GOOG, or TSLA or GTFO. Mutual funds and money market accounts are for peasants!
Damn you girls sure know how to derail *****
Speaking of missing the point - why are you continually ignoring the company match component of a 401(k)? Without that, I agree, it's just an IRA with less flexibility, but with it, you are potentially gaining a 50-100% boost to your returns. I cannot immediately think of a better way to build wealth, not to mention greatly the absolute ability to outpace the market. No one is saying it's the only way, or arguing against diversification - it's a baseline strategy, that is also done at little to no increase in risk. You may call it bread and circuses, but I call it a no-brainer - - the greatest risk-free wealth-building tool ever created. And the majority of Americans can take advantage of it, not just the smartest guys in the TexAgs millionaires room.Ragoo said:
you are missing the point entirely. Even at $7000 per year or $6500 or less in years past you can invest in stocks that can give you a return much greater than the 401k. If you had put your Roth in apple alone 13 years ago that account would rival the 401k today.
The point is that your wealth and retirement should consist of a blend of avenues. 401k, Roth, hsa, brokerage, even real estate or others if your path allows.
I am not saying what people should or shouldn't do. Simply pointing out that the comment was made that a 401k is a path to wealth but at best it is a path to pacing with the market.
Perfectly stated.
Company match varies and yes that is a strong component but there is a reason even going back to the early parts of this thread that the recommendation is to contribute to the match, maximize other avenues, then come back to the 401k.
No one size fits all answer for sure.
No one size fits all answer for sure.
OK - I certainly wasn't picking that up in your "at best pacing the market" statement.Ragoo said:
Company match varies and yes that is a strong component but there is a reason even going back to the early parts of this thread that the recommendation is to contribute to the match, maximize other avenues, then come back to the 401k.
No one size fits all answer for sure.
So, do we all agree that contributing up to the matching max 401(k) is the best fundamental avenue to build wealth? Not bread and circuses after all? If we agree on this, the discussion on the last few pages are kind of pointless.
I bleed maroon said:OK - I certainly wasn't picking that up in your "at best pacing the market" statement.Ragoo said:
Company match varies and yes that is a strong component but there is a reason even going back to the early parts of this thread that the recommendation is to contribute to the match, maximize other avenues, then come back to the 401k.
No one size fits all answer for sure.
So, do we all agree that contributing up to the matching max 401(k) is the best fundamental avenue to build wealth? Not bread and circuses after all? If we agree on this, the discussion on the last few pages are kind of pointless.
I don't anywhere else to get a risk free 100% overnight return on my money.
62strat said:
My company's "401k" is a profit sharing plan and they contribute 15%. I can't contribute anything, so not a true 401k, but same thing.
Had I worked here since I was 25 or so, It would be $2m+ by the time I retire. My first contribution was 37 years old however;
I plan to retire at 60 and it will be ~$1.5m.
Is that not wealth?
Only because you've been trained to believe that is wealth via 401k. Or something like that lol.
and that doesn't count my rollover 401k from my first 6 years in the workforce that I finally invested in aapl and amzn, among others. almost 10 years ago.AgOutsideAustin said:62strat said:
My company's "401k" is a profit sharing plan and they contribute 15%. I can't contribute anything, so not a true 401k, but same thing.
Had I worked here since I was 25 or so, It would be $2m+ by the time I retire. My first contribution was 37 years old however;
I plan to retire at 60 and it will be ~$1.5m.
Is that not wealth?
Not wealth you schmuck, now get outta here!!
Business or real estate wealth only up in here!!
I bet I have $1m in those two alone when I'm 60 lol.
But yeh, 401ks are just to make you feel good I guess.
There is a fundamental issue that this board will never agree on and that is the definition of wealth. For some, it is putting food on the table and having a ton of close friends. For some it is 1 million. Others $1 billion and possibly some $100 billion so you can be like Musk and Buffett. What is wealthy is highly subjective.
Once people accept that, a lot of the recent debate should end.
Once people accept that, a lot of the recent debate should end.
This thread has taken a veer off course.
The title is millionaires not "true wealth"
Many of you are doing very well and should be proud that you are saving for a secure life.
The title is millionaires not "true wealth"
Many of you are doing very well and should be proud that you are saving for a secure life.
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Nobody here is talking about beating the market though.Ragoo said:you are missing the point entirely. Even at $7000 per year or $6500 or less in years past you can invest in stocks that can give you a return much greater than the 401k. If you had put your Roth in apple alone 13 years ago that account would rival the 401k today.txaggie_08 said:Ragoo said:your backdoor roth isn't your 401k. You can direct invest it and have the possibility of a greater return. Which is why I was specific to say only a 401k.txaggie_08 said:Ragoo said:I don't think he is too far off actually.Brian Earl Spilner said:Red Pear Realty said:
My whole point from the beginning was that you cannot rely on a 401k to make you wealthy. You have to invest via other means. With the stats above, even assuming every American has 4-5 accounts with that average balance, the average person will be living below the poverty line.
Already been shown multiple times on this thread that this is untrue.
If a 401k is your only means of saving/investing you aren't getting outsized returns. You may get to $1MM may even get to $2Mm but you aren't getting to $4, 5, or 10MM.
Yes, you can. Between my wife and I, our 401ks, company match, and backdoor Roths, we can have several million in retirement accounts by retirement age (assuming the market continues its same average returns over next 20+ years).
Edit to add: your typical corporate sponsored 401k at best is tracking the S&P and could be doing worse. It is a consistent slow build to a number that should be considered a portion of your retirement picture.
My Roth Contribution is maxed at $7k this year, obviously less every year prior. You're not going to get rich off the Roth IRA.
My 401k has over half a million in it, by itself, and I've been investing in it for about 13 years now. I have 20+ years until retirement. Most of that half million in 401k were under smaller salaries when I wasn't maxing out contributions. But now I'm at a point where I can max out my 401k, plus the compounding interest on the current balance plus future contributions will make this account grow MUCH faster. I will have several million in that 401k by the time I reach retirement, not even counting my wife's 401k and our IRAs. We also have an HSA we're maxing out now with add'l company match. Several different retirement account options to build wealth, but my main point is my 401k alone should build more than enough wealth on its own.
The point is that your wealth and retirement should consist of a blend of avenues. 401k, Roth, hsa, brokerage, even real estate or others if your path allows.
I am not saying what people should or shouldn't do. Simply pointing out that the comment was made that a 401k is a path to wealth but at best it is a path to pacing with the market.
Once more, for the cheap seats -- maxing all retirement accounts (401k, Roth, HSA, Mega-backdoor Roth if available), and starting at the earliest possible time, is almost a guarantee that you will retire a millionaire, barring any disasters. In most cases, multimillionaire.
All you need to do is throw it into S&P or total market index funds and you're good to go. Maybe move to a target date once you get closer to retirement if you want to lower your risk at that point.
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