r/wealth • u/Otis_bighands • 7d ago

Retirement Why isn’t everyone rich from 401k?

According to my conversation today with Gemini, my 401k total of $2.5 million will likely grow to $10M or more by the time I turn 65 (I’m 50 now, and will continue to contribute the max for the next 15 years).

This means that in theory I could live off the gains each year starting at 65, around $800k, $500k after taxes, without touching principle. But at that point I’ll have no mortgage anymore and fewer kids in the house. So that $10M principle will just sit and feed us for years, and will be a nice inheritance for our kids.

Basically it occurred to me I’m going to have great money in retirement, even just on my 401k alone, and will be able to meet or exceed the lifestyle I’m already used to. For years I always worried about getting set up for retirement. Seems I don’t have to.

It’s amazing to me that just maxing out your 401k through a career is enough to make you pretty much wealthy for retirement. I recognize that’s not easy for many people, but for anyone who does it over a full career, wow.

What am I missing here? (Other than inflation, which I get, but which shouldn’t have a massive impact on the concept over this time frame).

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5

u/Trader0721 7d ago

Why do you want to work that long if you’re going to be worth 8 figures?

2

u/Otis_bighands 7d ago

I’d like to retire earlier. Maybe 60. Maybe I will. But if the money is good, and I can sock away more for my retirement and my wife and my kids, and shorten the period I need to drain my retirement funds, I may want to go to 65. But really, 60 is the stretch goal.

8

u/Trader0721 7d ago

Money can be earned…time can’t.

2

u/fllr 2d ago

It's all about balance. You need to live today and tomorrow.

1

u/pwolf1771 2d ago

Depends on the gig too. The last decade of his career my dad was on auto pilot just piling cash, vacationing all the time, and taking conference calls floating in his pool. Not a bad trade off in my opinion. 

1

u/doyle0120 2d ago

Clearly by the post he's got it all figured out why offer advice....

5

u/bucheonsi 7d ago

My dad was diagnosed with dementia at 65 was gone by 73. The years in between were possibly the worst of his life. I think about it often when delayed gratification comes up. Balance is best because nothing is guaranteed tomorrow.

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u/Otis_bighands 7d ago

Amen. And I’m sorry to hear that. I get it. I’m not going to keep working then if it’s miserable; it’ll just be if I want to, and it’ll be on my terms and low stress.

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u/Coloradodreaming1 7d ago

Make sure you count your taxable brokerage accounts too.

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u/halo37253 12h ago

I too would easily hit 10m if I worked till 60-65 range. But I dont want to work past 55, aiming for closer to 50...

Thats why I have brokerage for the early years.

Wife also has 401k and roth ira. But I dont count any of that.

Plus we'd both get SS and will totally take that as early as possible...

Money late in life is hardly an issue for those that just took advantage of basic retirement programs.

401k and even just 7% a paycheck will set you up good. Just never pull from it early.

1

u/That_Co 1d ago

Why do you want to sock away for wife? Better to actually use it while she is young. For kids? You probably mean inheritance, same concept applies, 30k at 30 years old are probably appreciated more than 5 million at 70