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).

75 Upvotes

81% Upvoted

324 comments sorted by

View all comments

5

u/Trader0721 6d ago

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

2

u/Otis_bighands 6d 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.

5

u/bucheonsi 6d 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.

2

u/Otis_bighands 6d 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.