A hot stock market lifted more retirement accounts to new heights in 2023, Fidelity says.
The number of folks with $1 million or more saved in their 401(k) accounts jumped 20% from September to the end of December, according to Fidelity Investments.
All told, there were 422,000 retirement savers in Fidelity 401(k) plans sporting balances of seven figures and beyond as of Dec. 31, up from 349,000 at the end of September and 299,000 at the end of 2022.
There were also 391,562 IRA millionaires on Dec. 31, up from 338,725 at the end of September and 280,320 at the end of December 2022.
Compound interest is magic. If you have any excess income to spare, max out your 401k.
Assuming a 7% average rate of return, if you contribute the maximum amount (using 20k for easy math), you will conservatively reach $1M in 22 years, and the real magic number of $2M in just over 30.
The sooner you start emphasizing saving, the sooner that clock starts ticking down. So if you’re able to start by 30, you have a shot at a high quality of life in retirement at 60, regardless of the continued existence of social security.
Unfortunately, most of the country can’t, and most are not even achieving the full company match (assuming they even offer one, usually something like 50 cents to the dollar for up to 6% of your salary, or 3600/year on average). At the average income and rate, one would only have $350k after that same 30 years, or $700k if fully vested with your company match.
For most people, this will not be enough to retire.
1.6k for 22years straight. sorry, im out.
good info, though.
if my employer was paying for it, then i might feel differently.