re: 401(k)

How so?

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$530k is certainly a nice start. But at a safe withdrawal rate (~4%) that's only $9k annually to live off of. If he triples it by retirement it still only yields $27k annually or he risks out living his nest egg. Most Americans are woefully unprepared for retirement so I'd keep asking for well above average contributions.

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I don't know where to begin.

As an "income" vehicle - $530k with a 4% draw is $21,200, gross annually, not $9k (no idea where you got that). And that is a preserve the principal in perpetuity, not to draw down for an actuarial table.

In other words, I retire at 67 with $530k, that's going to be over $30k per year, because they're going to set me to be broke at 85 or whatever my table says.

If he doubles that to $1 million, then his 18 year retirement schedule from 67 to 85 will be more like $60k annually.

(And I don't even fiddle with money for a living, baw.)

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Think 4% is too conservative a withdrawal rate? I'm considering early retirement soon so I'll need my nest egg to last 40-50 years.

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Could you really live for 40-50 years Without working? I understand the whole Mr. Money Mustache schtick, but I would go crazy if I had nothing to do for 40 years. I’d rather work 3 days a week between age 50-65 for my own mental sanity, than completely retire.

The NC stat guy is an AF doc with nearly 20 years in service, so he is retiring with a military pension, as well as his TSP funds. He already admitted his math was off.

you're doing very very well, I'd say. If you max out every year from now and average say 9% per year, you should have around $4 million by 65. Good job!

just go find a compound interest calculator online and play with the numbers...it's fun

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When does a 401k really start to grow?

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Look at the rate of change on this chart. The math starts to work it’s magic and really kick in when you get in your 50s and 60s.

The 10 years make a big difference as demonstrated by the graph. I think the idea is to encourage people to save early because it gets you to the steep part of the curve sooner creating even greater wealth (for the same retirement age).

That said, 30 years of solid investment provides a good nest egg. Whether it is enough for a comfortable retirement depends on many factors including life expectancy after retirement and what you think a comfortable life style means.

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So how far behind is someone if they start at 35 versus 25? I mean, if one wants to retire at 65, wouldn’t 30 solid years of investing yield a comfortable retirement? Or are those extra 10 years that critical?

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Not far behind at all. 40s and 50s are your key savings years, I mean how many people have more than $100k in their account before 30? Not many.

The key is really to save hard starting by 35, starting early is really just getting you into the habit.

Look at doctors for instance, many don't really start earning good money until their 30s especially Surgeons. Plenty of them retire before 60 or at least are able to.

Thank you for that chart CajunTiger gave me a major confidence booster hahah. Only 27, but way ahead of where I should be on that curve. Make a average salary for my age, but my company match is stupid good, so it's hard to leave.

Not to hijack the thread, but I have a certain question regarding my employer's 401k contribution. The company I am with makes a lump sum contribution deposit around the 15th of every January for their yearly contributions instead of matching me throughout the year. None of my friends 401ks work this way from who I've asked, so curious if anyone else's is that way or they have seen it before?