401k Millionaire Secrets Revealed | How To Join the 1%
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- เผยแพร่เมื่อ 5 มิ.ย. 2024
- 00:00 401(k) Millionaires
00:40 Enroll Right Away
02:33 Make It Automatic
03:32 Free Money
04:40 Be Disciplined
07:02 Accept Some Risk
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Disclaimer: Please note that this video is made for entertainment purposes only and not to be taken as financial advice. Always make sure to do your own research.
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Thanks for watching, I appreciate you!
I am currently in my 50s and This is no time to taper retirement savings. I want to max out my retirement contributions and I also have another $120k in a savings account that i want to invest in a non-retirement account. Where would you invest this as of now?
Look up dividend aristocrats. Pick six to ten from that list. Those companies have a track record of 25+ years of paying dividends. Also, its advisable you work with a financial advisor to help set up a well-structured portfolio.
I agree. Based on personal experience working with a financįal advlsor, I currently have $800k in a well-diversified portfolìo that has experienced exponential growth from when i started. It's not only about having money to invest in stõcks, but you also need to be knowledgeable, persistent, and have strong hands to back it up.
Your advisor must be really good. How I can get in touch? My retirement portfolio's decline is a concern, and I could use some guidance.
I'm cautious about giving specific recommendations as everyone's situation varies. Consider independent financial advisors like "KRISTIN AMBER LANDIS" I've worked with her for years and highly recommend her. Check if she meets your criteria.
Thanks for sharing. I curiously searched for her full name and her website popped up immediately. I looked through her credentials and did my due diligence before contacting her.
I'm 55, started my 401k at age 20, my wife at age 25. I now have nearly 2 million in mine, my wife has over 1.5 million. Worked continuously and always contributed, retiring in 7 weeks. It was very simple, but obviously not easy or everyone would do it.
Kudos and congrats! Enjoy retirement!
Great job, friend! You knocked that ball out of the park!
I just crossed the magic mark last week at 50. Only took me 20 years
Congratulations!!! 🎉
What’s the magic mark?
1 Million dollars @@chriselsen3345
@@chriselsen3345 I'm guessing one million dollars in a 401k/IRA. The topic of this video.
@@chriselsen3345 got laid for the first time
One of the 400K 401k millionaires here. The answer is 4 simple steps. 1) Start as early as possible. 2) Max it out on a before tax basis (for 2024 the max is $23,000) or as much as you possibly can every single year. 3) invest all of it in an S&P500 index or ETF fund it’s all about growth 4) forget about it and check it in around 20 years and you will be a 401k millionaire.
I found the 401k to be the trick. The pretax money never shows up in your paycheck so you ignore it. I can't imagine making big gains without an automated investing plan. It's human nature to spend every dime.
It really is that simple. Thank God I asked a fellow employee who dressed a lot nicer than the rest of us what was his secret. Turns out he had been a stock broker, but got out of the rat race. He sat me down when I was a new guy and explained it to me. Before, I had all my money going into government securities that at the time did not even keep up with inflation.
Sorry but I disagree with 1 part. I would make my contribution in Roth if the 401k accommodates. Future taxes will probably be higher. Too much ordinary income in retirement will expose you to taxes on your social security.
Inflation is a hidden tax. You’re going to compound and have a huge valid you start early and max out. You will need to take out much bigger amounts just to consume what you’re spending in today’s dollars. Do you think even if they don’t raise tax taxes, they will inflation adjust the brackets?
@@Mantraflip I would assume the brackets would be inflation adjusted, otherwise they would be mostly useless.
Discipline is the key behavior for most good things in life
Erin has nailed it! Invest, invest early, and dont withdraw it. About 25 years ago I read a book titled "The Millionaire Next Door". It was about how the US has a lot of millionaires, but you dont know it because they lead a more basic life style. The main points of the book were spend less than you earn, don't buy status objects or live a status lifestyle, and invest. Great book. And Erin always has great advice
His follow up is even better. The Millionaire Mind. He goes over the behaviors and habits. They basically follow the rules in The Richest Man in Babylon. They seek balance sheet riches, not income statement riches.
Love all of this! …ps, if I ever do a video titled something along, the lines of this book is better than the millionaire next door, this is your spoiler alert that it is about the millionaire mindset. I love all of Dr. Stanley’s work, he’s done a lot of really good for the financial community.
@@Savvynomad225 Thanks, I'll check it out 👍
Avoid “Big Hat, No Cattle.”
@@michaelswami😂😂
In 2000 I took a new job as a RN. I was single and started maxing out my 401K. In 2019 it crossed the $1 million mark. As many people did I took a big hit with the pandemic. Lost around $250K however I kept contributing. Today I’m 53y/o and it’s worth $1.65 million. I’m seriously considering the Rule of 55. Nursing has been good to me but I’m getting burnt out!!
I’m in the same boat as you buddy, I’m 56 and want to retire soon. Nursing has been a great career but so stressful
Congrats to both of you. Also consider working part time for a while to stretch the life of your investments. There are more remote/video nursing jobs, and maybe you can do those full or part-time for a few more years while your nest eggs expands.
I'm also in healthcare (but only 7 years in). Congrats to you both!!
You (And everyone else) needs to stop saying the you "lost" 250K.
Until you take a distribution, those "loses" are actually
BUYING OPPORTUNITIES!!
@@timsans1170 yes you are correct!! I should have said “my portfolio went down $250K”. Thx
Crossed that $1 million point in my 401K, in 2019 at 46 years old. Started contributing in 2000, and have not let off. Just take my yearly raises and put it toward maxing out my yearly contribution. It is the out of sight out of mind approach!!!
Nice work!
Congrats !!
Erin, you're spot on here. My father-in-law never made over $38,000 a year. He now has a net worth of $2 million. He's done amazingly well following many of the points you made. Not one college credit to his name. He taught me so much about saving and discipline. I won't disclose what I have, but I know I'll ever run out of money. I had an uncle who also taught me as a young man to "delay gratification". I did and his words were prophetic. My wife and I were married young, right out of college, I had $0 going into the marriage (went to college on an ROTC scholarship). I still can't believe how the exact advice you give actually worked! I also can't believe I was able to talk my wife into marrying me without a cent to my name....going on 37 years in June!
Great video Erin. My first real job was with a government entity so we didn’t have a 401k, we had a 457 but there was no match. During the 10 years I worked there I contributed the maximum amount. In 1991, I joined the law department of a Fortune 500 insurance company. We had a 401k with a 6% of salary match. I contributed the maximum amount allowed by the IRS for the 30 years I worked there. In addition, we had a traditional defined benefits pension plan. When I turned 50, I contributed the full catchup amount. In 2016, the company discontinued its traditional pension (fortunately I had enough years of service with the company and was old enough so I was grandfathered for the pension). In lieu of the pension, the company increased its match to 9%. I also received the 9% match. When I retired at the end of 2021, I had almost $3 million in my 401k. I never really noticed the money I was contributing every paycheck because I never let my lifestyle include this amount. In my opinion, a 401k is the easiest way to become a millionaire.
Very good job at building!
I know of a few people who have literally emptied their 401k accounts LONG before they were retired. It made me sick to my stomach to hear those stories. And the reasons weren't always very compelling. It came down to things like, "I hate my job. I'm going to try to be a musician instead." And then a year or so later when their career as a professional musician was still going nowhere, they'd get another full-time job, but now with zero saved for retirement. NEVER take it out!! 😂
I knew a friend that lost a job, had the hardest time getting another, and ended up dipping into her retirement savings for a time. When she got dinged on taxes for withdrawing, that really pissed her off and spurred her to find work. Today, she finally got FT permanent status again, with all the benefits and pensions that go along with that. Some folks won't listen to reason and learn from other people's mistakes. As one of my colleagues once said (which made me laugh) "Some people just have to learn with their own money"...sadly, true.
That's a great quotation from your colleague! I love it! @@dstevens518
My wife and I’m proud to say we are in this “exclusive club” after saving our money for many years and listening to people like you!
I've started over "post divorce" at 33. I'm not quite over 7 figures, but only 100K away in the 401k at 52. Admittedly, I live "below my means" and I've been putting in 20-23%... I'll get there before I retire. And great content as usual Erin, thank you for your positive energy
Great job!! Way to stick it to her
Congrats !! And after a divorce too 👍 you’re way ahead of most people
Discipine and time, you're the kind of person that's unsinkable. Kudos.
Same here, got divorced at 42. 20 years later and on the cusp of 7 figures
Hitting the first $100K was exciting, looking forward to the first $1M
the first $100k is the toughest, so you are doing well. The next $200k takes less time and your investment returns start working more for you than your contributions after that.
You'll get there. $100k is quite an accomplishment. Good luck in your journey.
Congratulations! You are on your way - the magic of compound interest will begin to accelerate your progress so feed it!
Charlie munger said the 1st 100k was the hardest. I found this to be true. The million mark came much faster.
What contribution percentage?
Striving to meet your personal goal is one thing. Constant comparing yourself to others is a fools game.
Maxing my and my wife’s 401k contributions and learning to within the remaining income was the greatest step toward financial independence we’ve taken.
Our friends drive new cars, have nicer homes and take more vacations. We’ll retire earlier with 3-5 million in retirement and lie off interest alone, creating generational wealth for our family
It's still a high bar to meet but those stats do underestimate the number of 401k millionaires. I have three 401k accounts, an IRA, and a Roth IRA. There's a big difference between the balance of any one of those accounts and the balance across all those accounts. :)
That’s true!
Most people should probably consolidate accounts, especially 401k’s into IRAs.
I just crossed $1M in my 401K account. I am 46 years old. My only regret is that I didn’t start investing earlier. I also went very conservative initially since I was scared of the market volatility. But I am happy I stayed my course and now I see the rewards of all that hard work.
I finally became a 401k millionaire in 2020 after saving for 20 years. The goalpost then got moved to $1.5 million. This new goal became too easy. $2.0 is the new goal.
Human nature and the Hedonic Treadmill will do this to you.
I feel your frustration. I was set to retire this with some really good numbers, but because of inflation, that got set back a couple years.
Honestly, the "million" mark meant a lot more when I started my career than it does now. 2 million is then new 1 million.
Erin, you literally showed what my wife and I did when we got started on our careers back in the early 80s. The investment decisions I made in the early years (maybe the first 8 or so?) weren't good, but we were in the game. Fast forward 40+ years, and our IRA/403b is well north of the $1M mark.
Erin great video.
i got into our 401K in Jan 1993 with 10% of my pay and a 3% match. now i am retired at 62. i followed all the steps you outlined.
thanks i hope a lot of people will follow your steps it will make there future a lot brighter not just by being financially secure but by learning discipline.
That's the big learning lesson that's dawned on me over the decades. Everyone nowadays wants immediate gratification. I think it not only speaks to their insatiable appetite for instant reward, but also to their deep-seated lack of confidence that they can control themselves. No high income or investing good fortune will save you from yourself. Find the discipline, and all good things will follow. Find it for a long time, and those good things will multiply.
I completely agree! My first year into a 401k was 1998 I invested above 13% and invested heavier in a down market, I hit the magic number years ago , I’m semi retired now at 60. I’m not a college grad and very middle-class. Anybody can do this. Just need discipline like you said my wife and I will have a good retirement.. great advice
Thank you for sharing!!
I have reached $1M in my 401k when I turned 59. I maximized my contribution every month along with company match into low cost SPY index fund only over three decades. And exactly what Erin taking about in this video is 100% correct. Especially resonate with me is consistency and discipline.
Pretty, smart and her voice is so soft, I could watch and listen to her read the phone book
Erin: only 1.5% of the total population has $1M in their 401k.
Everyone in the comments: I got to $1M in my 401k in 2019!
Ha. Kinda funny but not wrong by reading these comments!
That probably because the majority of the commenters are watching because they actually take an interest in personal finance. Thus they are way more likely to be successful in saving for retirement.
There are 37k views for this vid and there certainly isn’t anywhere close to 37k comments claiming they are at 1MM. 😂.
There isn’t even over 500 comments which would be 1.5%. There is nothing wrong with this either.
Most are over saving into a 401k and some realize it and are stuck. Some think of retiring early but what about medical insurance. ACA is unstable and who knows if it will be there.
@@f430ferrari5no offense, but the OP said ‘commenters’, not every VIEWER.
But curious as to why you say/think people are OVER saving into 401’s?
@@brandon8531 of course most who will volunteer to comment will say as such. Yes?
The rest of the 37k are obviously not volunteering their own info since it’s well below. So they don’t comment.
And as far as the over save you may want to do better research. The conditions are as follows:
1. If somebody has saved 2 million in a 401k then…
2. This person has 35 working years to command a decent social security check for themselves and at least half for the spouse and
3. They most likely already have a home and even mortgage paid off
So now with these conditions, what can a person exactly be spending at 80k a year just in 4% withdrawals. You then have 60k in social security income and now 85% of the SS income is subject to tax.
Even if one retires early, the medical insurance situation is unstable. You withdraw too much from your 401k/IRA and the family can be paying insane insurance premiums.
So one simply saved more to pay more future taxes and insurance.
There is a “balance”. Most don’t even need a million in a 401k.
They should do research to count any kind of retirement account. Every time I've left a job, I've moved the money to a compatible brokerage account (meaning IRA and/or Roth compatible). Just because it's not in a 401k account anymore, that doesn't mean I'm not saving for retirement.
And one can roll a portion of 401K once each year, which I just did.
If you include Roth IRAs and brokerage accounts, I suspect there would be a sizeable jump in millionaires. Looking strictly at 401k balances is not inclusive of most investors.
Many people moved employers and have money in their Iras. A better figure is how many people have over 1 million total in all their retirement accounts which is a lot more than 1.5 percent.
It would be very difficult to gather that data. The often quoted data in this video is more readily available. I also doubt the difference changes the message much; it still won’t be many people
@@chemquestsyou are correct
Yeah but most people that hit a million in their 401k also have IRAs. It is the rare person that stays long in a situation where each of their accounts stay below a million.
Time is the most critical factor. I showed my 20 something son the calculation if he saved 20% of his pay check starting now. He would have over 5.5 millions at 65.
And that just the present check. It will be much more with skills, responsibility and inflation.
Yes its harder when you start "late". I didn't get serious until the age of 36 and was lucky to hit the "boom" years. Honestly the biggest "luck" I had was going absolutely mad during the 2008 meltdown.. I was almost looking for spare change to throw into the market! I had a decent salary but only cracked $100k in two years in my career. Took me to 52 (when I retired) to hit just over $1.3M in total investments. Today investments total $3.36M plus a paid off house. Thats compounding right there!
Buying in 2008 was brilliant. Good move.
Thanks. It was really hard to do because everybody and their dog was screaming at me to "get my money out before I had nothing left." A sea of red all over the news etc etc. Then I saw Warren Buffet say "This is the cheapest stocks are likely to be in your lifetime". I also rationed that the worse that could happen is we would be broke and I would have to work forever. We already had the house paid off by that time so I reasoned that if I lost my job I just needed enough for food and $2000/yr in RE taxes. So I turned off the news and just kept piling it into stocks.@@johnnysimes5082
Congrats fellow 2 comma club member
Consistently contributing is absolutely the most important thing to do. We've been ignorant through most of the ride, had way too much in equities at times, done so many stupid things, and we're still way ahead of where we ever imagined. Next most important point imo is to take the free money. I'm so glad you quantified how a little bit of free money from your employer each year can grow to over $500k. We're seeing that exact same scenario now, and the hilarious part is we've contributed maybe a quarter of our total, the employer more (!), and the biggest part by far is all return! Take the free money, and let the power of compounding make it grow. Invest smarter, not harder!
I followed the strategies you’ve laid out starting in 1993 and now I’m a multi-millionaire. Yes I’ve had some down years but just like the upward trend of the stock market my investments have continued to grow over time. I had a soft retirement from my 9-5 job last year and now I have a job doing something that really excites me and doesn’t bring the stress that my old job did. I’ll do this for a couple years as I ease into retirement and let my investments continue to grow.
Really appreciate your channel and the subjects you cover!
Does this include IRA's as well? I imagine lots of people get 6 figures and switch jobs and convert 401k to IRA over and over.
Engagement comment for Erin. Keep up the great work!
One of the best things I ever did was to invest in my employers 403B account. I started with 6% when I started 26 years ago. My employer at the time gave employees 2% and if you put in up to 6% they match giving me an additional 3%. In total that was 11% investment each year. Over time I moved this up to 15% of my income although unfortunately my employer dropped the 2% "free" money to 1%. SO with my employer match and the extra 1% I have 19% of my money going into my 403B account. Yes I am definitely on my way to become a 403B Millionaire.
Congrats! I have zero understanding of why folks can't delay gratification of spending today, for SO MUCH more later. You don't even miss it when you've been socking it away before you even get it for decades. And the satisfaction of watching it grow is so much better than the money stress most folks have knowing they're not going to ever be able to retire...
Company match is big help, my husband that made less than me and contributed less than me has about the same balance after 20 years (me started 5 years earlier), his employer has 6% match and me “Zero”.
@@dstevens518it’s so frustrating!! Very little discipline I suppose.
Well you may have a better grasp when it comes to paying bills. A good percentage of people live paycheck to paycheck. Factoring in inflation many people can't do the right thing by saving a percentage of pay to a retirement account and hope for the best.
My company matches 6% and will
increase my contribution 1% every year unless changed. I’ve made sure never to touch that additional 1%, and now that I’ve been with them for 13 years, my contributions are 19% with a 6% match.
Starting early was the key.
In my opinion, there is one more rule. Maybe I am investing in the wrong funds or wrong timing. But, for me, I just reached $1M after 25 years of completing all the rules you outlined … but only because I have been maxing out the contributions even with 6% employer match every single years to the government upper limit plus all the catch-up contributions since I turned 50 in order to reach that magic $1M
The average age to reach 1M is 59 so you’re doing great 👍
Very few individuals and only 8% of professional advisors beat the S&P 500 each year. Trick is to be 100% in the S&P and don’t try to time the market.
Thanks for all the good info from friends in the U.P! Time to go snowboarding!
Hey Erin,
Would you consider doing an episode on health insurance options for those of us considering early retirement?
Thanks!
This
Yes please!!!
My wife and I are in this position. Minimizing earned income is critical.
@@hm51008 thank you
Here’s my situation in detail: I have 2 full time jobs, one with excellent health benefits, and one without but with exceptional pay. I’m at my breaking point at the one with benefits, and would like to leave while staying at the other job until I reach FIRE. My issue is health insurance.
Great video Erin! You have managed to pack a lot into a very concise video discussion; nice job. It actually is quite simple if people would simply follow what you have outlined. It's even easier today with indexing. As is always the case, people are their worse enemy and chose to do the wrong things, not realizing the long term impact it will have. Keep up the great content Erin, I'm certain you are helping a lot of people. Larry, Central Valley, Ca.
Save, invest, and don’t spend. Shocking how much 401k has grown in 20 years. A million is achievable by most people that are interested enough to be watching this video
i think you need to spend something, else how you gonna eat?
If it’s available in your plan use the Roth 401K option or a mixture of both Roth and traditional, one million dollars tax free sounds much better 😁
Simple and sensible! Great video!
Been there done that, the issue with these studies it doesn’t take in account IRAs individuals may have or married couples combined accounts.
Or non-retirement brokerage accounts
@@halcooper6059thank you forgot that bucket as well
Google your name and look for places that list net worth. It is cheap and easy to know your net worth better than you know your net worth. It's no accident I get invitations to fancy restaurants for short, friendly, no pressure information I really need.
Crossed this mark at age 38. 1.4mm now at age 41z it really does start to snowball
Well said!!! Start early, take advantage of the full company match, and let compounding do the rest!!!
I started at 28 when I had my first real job. Now I am 46 and have about 1.2 M in 403b. I regret that I didn’t max out in the firs few years.
Don’t kick yourself. You’re doing much, much better than the vast majority of people and will be a multimillion in ten years or less. I didn’t max out as I was saving to buy my first home when I started and my company didn’t even offer a stock fund for the first few years. Your biggest issue ‘may’ be being pushed into a higher tax bracket when you retire and hit the Required Minimum Distributions in your 70s. It might be worth spending a couple thousand now on a ‘flat fee’ advisor to determine if you need to start contributing to a Roth 401K/RothIRA.
I am investing 45 percent of my salary plus a 8 percent employer match which equals to 53 percent of my salary 😊
The only problem I have with this is my wife and I have at least 4 accounts between IRA/401k, then we have post-tax investments. Of all of these accounts none are million dollar accounts, but we have a net worth exceeding 4m. Basically: An account is not a household number, and if viewed as a household number it can lead to incorrect conclusions.
Might be interesting to see this by household vs individual accounts. Many of us spread accounts over brokerages or multiple at the same brokerage for reasons…
Thank you for making a positive impact in helping others reach financial freedom.
Great insight and great video!
My employer contributions account for 46% of my total balance. And it’s not a small sum. The actual match isn’t that high, but it’s been compounding for years.
That’s awesome!!! Thank you for sharing!
Enjoy your videos. Commenting for engagement, but also I’d love if you would link to the studies/articles you refer to in your videos.
We did it, on a single income. Everything you mentioned is spot-on. In addition, I would add that dollar cost averaging makes up for market dips as long as one follows all the other advice. Our 401k balance took hits after 9/11, the ‘08-09 housing crash, COVID, and Russia’s invasion of Ukraine. Our sustained contributions bought more shares at the depressed prices, so when markets recovered, our gains were turbocharged.
I started saving at 29 and reached the 2 comma club at 50. What helped was having a great job and income and maxing out my 401k almost every year. I was 80/20 but recently went to 60/30/10. Got to keep what I saved
Depends on when you're planning to retire.
If it's 10 plus years, you're doing yourself an injustice.
You don't "lose money" unless you take a distribution.
Paper losses are meaningless
@@timsans1170 I agree with you. I have a pension of $40K and an emergency fund of $250K and hit $1.2 M at 55. Didn’t need to pull from the 401K for several years and could ride out any swings and so stayed in the S&P500 100% and retired at 55. Now at 64, I have $3.3 M in the 401K even after pulling $60K a year the last four years.
I found the first $1M was the hardest milestone to hit. That was around 4 years ago. Today, it's at $2.4M. Goal is minimum $6M.
First billion even harder but you have to be patient
My wife and I plan to retire in our 50s before we hit your goal. I am totally confident if I worked till normal retirement age we would have 8 figures combined but do I need that?
That only obtainable if you make high high salary like over 300k
@@francisoconnor2392 My starting salary was $22K and my final salary was $147K when I retired at 55 with $1,2M. Didn’t need to touch the 401K for several years and so stayed 100% in the S&P500. Now at 64 my 401K is $3.3M after taking $60K a year the last four years. Miracle of compound interest and staying in equities and no trying to time the market.
I feel very blessed and lucky to hit it at 49. I wasn’t even thinking I could reach that level even by 65. I’m 54 now and it’s gone into the stratosphere! I have enough to retire now with even a higher income but I don’t like the thought of paying full price for health insurance.
The data you share sometimes surprises me. I simply never think about where I sit relative to everyone else, but it distresses me to think how few people have taken advantage of the opportunity placed in front of themselves to possibly create generational wealth, and that only from working for a living.
I would also share that it can be done while making some typical mistakes like not starting early enough or even without matching funds. Some of these investing vehicles were not available early in my career, and matching was never available to me.
Such an important video for young people. My message to all of the young people where I work, or any younger person for that matter. If you can, live with your parents for a year or two when first starting in the workforce. Tell your parents your plan, and put every thing you can into your 401K up to the max limit if possible. That money having 45 years to grow will really surprise you! Especially those who totally reliant on "themselves" for their retirement future. Once again, great video, thank you! :)
We have a baby sitter for our son, she just graduated college in December. She was telling me she wanted to move out right away and find her own place. I told her the same thing. I said assuming you have a good relationship with your parents, work, and save hard for a year or two, then move out! It can make such a huge difference!
The odds of men dying before reaching 60 is almost 17%
If you wait too long to collect that 7 figure sum, you may end up with nothing.
For sure.
The best time to plant a tree? 30 years ago. The second best time to plant a tree. Today.
Thank you Bill Kelly.
For me, it's been just what you said. It's been index funds and maxing out my contributions and the company's contributions. the problem is that it's scattered across three brokerages. wondering if I should consolidate? what are your thoughts on that Erin?
I’ve found the underlying key component to having a large 401k balance is
(1) No Consumer Debt (other than a mortgage)
(2) Make every single effort to max out the contribution limits set by the IRS every year
(3) Do Not Legally Marry
I am in my mid 40s and if my projections hold true I’ve reached close or just about $3 Million by the time I retire at age 62, that figure does not include my personal IRA, and my brokerage accounts
Erin, thanks for the great content. How does Fidelity or Vanguard factor in people with multiple 401K/IRAs for various obvious reasons? If they're not, are they not underreporting the 401K Millionaires? Am I missing something here?
In any single account, I have a while yet before I become a millionaire in that account. Totalling across all accounts, I should be a millionnaire, if I do nothing, comfortably within twenty years. More like fourteen, but I am rounding up. That is if I do nothing else at this point. If I contribute more along the way, then I reach that milestone even sooner. I am thirty-one years old right now.
10-15%.. Keep going and never pulling it out. Its for Retirement, NOT a house a car or a savings account. Family approach too, not just one person.
Hit seven (7) figures in my 401K six years ago with max contributions + company matches for 25yrs. Plus, invested an additional 10 - 20% of my total comp every year while buying a home and paying off $150K in student loan debt.🤢🤮😂 I learned to prioritize my needs vs wants, started using credit responsibly, stayed invested in market (like Erin says in the video) and prepared myself for the curveballs (financial and non financial) that life tossed my way. Now looking forward to early retirement (55) in a few years.
I'm kind of shocked that there is such a low amount of millionaire 401k holders. I'm hoping I can get there by the time I retire. I still have a long way to go myself.
Alot of people do one of two things or both. They don't change the default funds that the 401 k is in so it makes no money.
They don't increase the contribution amount. I'm on the cusp of two tax brackets so before I give to uncle Sam I would rather add additional pretax contributions.
@@trfrierson That's smart to keep that tax money in your pocket.
A real challenge to the 401k program is that people can see their balance online whenever they want - and that money can burn a hole in their pocket - especially when it comes to paying off debt. It can seem to make sense to pay off a 20% credit card with 401K money - but as Erin pointed out, that can derail your savings program. And without the discipline to manage further debt, it can come back again.
Age is critical to contextualizing any balance number. The percentage of 1m+ 401Ks *at 65* is what I'd like to know.
About 10%
Unfortunately lots of employers don’t offer much of a match anymore. My last three jobs offered less than 5% 401k match. I remembered when jobs offered at least a 25% match.
Once you achieve a million dollar nest egg, you can draw off enough to equal living someone off the taxpayer having never saved a dime.
Erin Talks Money!
Curious to see your thoughts on a small portion in BTC etf in your portfolio.
Sure, After fully investing in standard retirement plans and emergency reserves, buy some bitcoin/precious metals/oil exploration company/newest tech company with your mad money.
Another Tip, during those Bear Markets (20-30% drops) double your normal contributions. Good Luck future Millionaires!
Having the money for retirement is nice as it reduces a lot of anxiety
After I had 200k I felt much better
Unfortunately money scarcity syndrome is an issue
I lived in poverty when I was young and it’s hard to change one’s thinking away from it
Poverty sucks
Google says 8.8% of people in the US are millionaires. I know this video isn't saying only 1% of people are millionaires but, people hear things that are not said a lot.
The figure to be in the top 1% of net worth is about 12 Million now. People worth that much probably have a better distribution of $ in accounts that aren't taxed when they withdraw also.
@@DigitalHaze65536 Somebody said the other day that most millionaires didn't inherit a million dollars. I think that leads to a misconception that most millionaires made it all on their own. I think a lot of millionaires learned money management and received money from people that left them an inheritance.
I don't know about getting to a point that I can withdraw without paying tax but, I have gotten to the point I have a lot more income than I spend, RMDs. I'm looking at my estate and what I can invest in that doesn't generate income for me and gets a stepped up basis for my heirs.
google doesn't say anything, since it's a data aggregator. The first result google probably spits out a link to zippia, which based the 22m adults or 8.8% adult millionaires from Credit Suisse Global Wealth Report.
I agree with you on the steps to reach retirement savings goal. However, there are a couple of points that would have made this post better. Many people have multiple retirement savings accounts. Each account may be less than 1 mil, but the combined amount may be over. In addition, the percentage of all people having 1+ mil savings is not as good a measurement as the percentage of people near or at retirement age with 1+ mil.
If Vanguard was smart they would be compensating you a bit. This type of content is way better for individual’s who would prefer a short, informative video rather than reading a book.
More than ready for my account to snowball now that it's hit critical mass--and not even at one million yet!
Retirement planning is crucial. Did you know that in some parts of the world, you need over a million dollars to retire comfortably?
Wow, that's a hefty sum. I've been retired for three years now, and I'm only 46.
@@BrianAlbert-hh3pi How is that possible?
I was so confused by this comment. Then I realized it’s setting up for a scam financial advisor recommendation.
Yes including here in the USA
well, most parts of the world, how do the people even go without any retirement planning or savings or system?
I wonder how many people have $1M across multiple 401k and IRA accounts because of job changes. I've currently got an IRA where I put all of my previous jobs money but a 401k for my current job.
I’d be interested in seeing that same stat of 401k millionaires when aggregating all 401ks for an individual, or maybe even a couple. I’m in my 30s and have 4 different 401k accounts with different brokerages at this point and in the next 40 years who knows how many more jobs I’ll have that use different ones.
Something I was wonder about these stats from Fidelity, Vanguard, etc…
If an individual holds multiple 401k accounts, are they combined for these figures? Or considered individual accounts?
I.e. if I have 3 separate accounts with Fidelity from 3 different employers (1 current and 2 prior), and each has 30k-50k in them, totaling over 100k, what gets included? Am I considered one account with that > 100k total? Or am I being counted as 3 accounts with those individual amounts?
I wonder the same question. My thoughts are these are just value from one single institute. Therefore, it does not reflect the Blanche from another institute belonging to the same person.
Money time discipline are the ingredients ❤
I Chose real estate instead. $40k-$60k/ yr on $1.2M (not what I paid, but what it’s worth now) in property.
If we count just my retirement accounts at work and nothing from my wife or my non-retirement investment accounts I have achieved this in January at the age of 51/52. However it took me over 26 years. Most of which I had a 5 figure salary. I work for the same university I got my CS and EE degrees.
If I do become a millionaire it will be most including an inherited taxable brokerage account. My net worth is a little over $400,000 and only about 15% of that is in a Roth IRA and Roth 401k.
I am a 401K millionaire. Invest the max allowed to make sure you take all the matching funds available. Live below your means. Retire early. Fly to Bonaire next week.
I like your videos but for this one I have a suggestion for improvement. I have $9M in retirement money but I am not a 401k millionaire. The reason is that every time I left my job for a better one I rolled my 401K into a rollover IRA. So my suggestion is to include Rollover money in your 401K analysis.
I suspect those folks that become 401K millionaires are folks that stay with the same company a long time. And that is a rare breed nowadays.
Two words to all.......
PRE NUP!
Many have 401k accounts with different vendors such as Fidelity, Vanguard , or others. Americans are richer than you know.
Which is why I say prices continue to go up… SOMEBODY keeps spending $$….
compared to Chadians, yes.
Pay the penalty and invest the money in real estate. You can double your money in a year. That more than pays for the penalty. Also tax deferred indefinitely if done correctly
I started putting in 10%-15% of my earnings into my 401k in 1990. I'm now just cresting over $1 million with 8 more years left until retirement. Now that my wife and I are self-employed, we can put in up to 25% of our income into a SEP-IRA...meaning that we should be able to add about $450k over the next 8 years and if the market has reasonable returns, it should be over $2 million when I retire.
8 more years?!? So you’re going to work for over 40 years?! Bump that… no thanks.
@@brandon8531 It's not bad. I own my own business. I take about 6 weeks of vacation a year.
you probably want to check with a CPA. it's up to 25% business revenue not income or 20% sole proprietorship, or max $69k for 2024. Did you do the math to compare against Solo-401k?
@@hanwagu9967 My wife and I each have a Subchapter S Corp. We contribute just under our cap each yar.
@@andrewdiamond2697 well, solo-401k affords catchup contributions, though, sep-ira does not. presumably if you earn more you are better off with solo-401k in terms of how much you cn contribute.
The best way to stomach downturns is to remember that it will come back and that the money you are contributing during the downturn will be worth even more than what you already had invested when the market comes back. Not covered is be aware of the fees in the funds you select - if two similar funds pick the lower cost fund, look at the 10 year returns of funds rather than 1 year, review your investment selections once or twice a year and adjust only then. Start with the company match and then increase as you get salary increases. Say you get a 4% salary increase, take 1% and increase the 401K contribution.
Only about 8% of ‘professional’ advisors beat the S&P500. Best to just put all your 401K in the S&P and no trying to time the market until you are a few years from retirement.
I only have a finite amount of money to save and so I contribute the minimum to get the employer match on my 401(k) and then focus on my (and my wife’s) Roth IRA’s. The thing that frustrates me about my 401(k) is the lowest expense ratio for their investment options is 0.45%. I much prefer those 0.04% Vanguard index funds.
Man, I'd open a brokerage account and contribute a portion of your paycheck into that Brokerage account Where you can choose between different Vanguard ETF's to contribute...that .45% expense ratio is too much.
@@bullydakidd2023, thanks a lot for the feedback. I already do have a brokerage though my contributions there at this time are minimal because I’m feeding so much elsewhere. The only reason I contribute to the 401 is the employer match, otherwise I’d concentrate everything in Vanguard. It’s very frustrating.
Pay yourself first! If you max your savings as much as you can afford and live on what's left, not only are you building wealth, but you get used to living more modestly. Win-win. Gotta admit though, when my account dipped $500k I was sweating bullets, but I kept pumping money in and it rebounded more than double that. Just need to be careful to reduce volatility of investment as I get close to retirement so I don't try to draw during a down market.
I think the number of millionaires is much greater than they know as there are usually multiple incomes in a household, and these stats don't include equity in homes, among other things. Although, since I live in my home, I don't include it in my net worth. Until I die, it simply represents the lack of an expense. My view point and I know some others disagree.
So someone with no investments but a 10 million dollar home is worse off than someone renting an apartment with 1 million in investments? Lol. Ok. Homes are an asset, bro. Include them on your balance sheet.
I agree with you, that's what I don't count my car. Even though houses appreciate, but so do property taxes! And they require maintenance. So it feels like a car, but you don't have to replace it eventually lol 😂
@@robloxvids2233its personal preference. But you shouldn't have all your money tied up in real estate because its not at all liquid. And yes, I would think you're in a bad spot if you have zero cash and a very expensive house. Many people have to downsize because they don't account for rising property taxes or huge maintenance bills that come up. If you're going to count real estate, then you need to do it thoughtfully. For many people, they want to know how much money they have at their disposal, maybe its not the literal net worth but it's the most useful number to them
@robloxvids2233 Remember 2009 bro? Many had $300k mortgages on homes that became $150k homes. I've been around the block a few times. I specifically stated "I know some others disagree". Yet here you are! You do it your way.
Divorce can take the wind out of your sails. Happy to report you can recover.