YOUR $2.5 MILLION 401-K ROAD MAP – WORK, STRATEGY AND MOST OF ALL COMMON SENSE!
Disclaimer: Good Day, Readers. WealthBuildingPowers blog is a financial literacy/competency blog and does not provide specific investment recommendations.
Maximizing Your 401-k
Most Americans will not achieve a $2.5 Million 401-K balance. We are NOT MOST PEOPLE!
About 69% of employees have access to retirement plans through their employer, BUT 25% chose not to contribute one dollar!
- Eight percent only save their company’s default amount, on average, about six percent.
- Twenty-four percent contribute just enough to gain their company’s match—about four percent.
The majority of Americans need to contribute more.
IF YOU DO NOT HAVE ACCESS TO A 401K PLAN, HERE ARE ALTERNATIVES
- Traditional IRA.
- Roth IRA.
- SEP IRA.
- Solo 401(k)
- Health savings account.
- Taxable brokerage account.
- Real estate.
THE MULTI-MILLION DOLLAR STRATEGY
- Obtain an education that sets you up for earnings: Trades, Apprenticeships, Community College, University, anything that can earn you money!
- Use your education/competencies to get a job or start your business.
- #1 RULE – EARN MORE THAN YOU SPEND!
- “Stop buying STUFF you don’t need. Become a serious lifelong saver.
- If you have student loans, you must pay those off AND invest in your Retirement simultaneously.
- If you have access to a 401K plan, sign up on THE FIRST DAY you are eligible. If you cannot access a 401K plan, consider investing in the above alternatives.
- On day one, contribute enough to get 100% of company match dollars.
- Your target is a minimum of 10 percent contributions, and then increase it to 15% or more ASAP.
- NOW TAKE A DEEP BREATH and max out your 401K contribution. For 2023, the 401(k)-contribution limit for employees is $22,500, or $30,000 if you are 50 or older.
- NEVER EVER TAKE AN EARLY WITHDRAWAL. NO EXCUSES.
The $2.5 Million 401-k Blueprint: No Complex Techniques Required
ASSUMPTIONS: CONTRIBUTING 10%, STARTING AT AGE 25
Currently Saved: $10,000.00
Monthly Salary: $8,000.00
Annual Salary Raise (%): 2.5
Contribution (%): 10.0
Return Rate (%): 9
Employer Match (%): 4.0
Years Until Retire: 30
Amount at Retirement: $2,553,424.50
Employee Contribution: $421,465.95
Employer Match: $168,586.38
Investment Gain: $1,953,372.17
Growing Your 401k to $3.5 Million: Simple and Effective Strategy
ASSUMPTIONS: CONTRIBUTING 15%, STARTING AT AGE 25
Currently Saved: $10,000.00
Monthly Salary: $8,000.00
Annual Salary Raise (%): 2.5
Contribution (%): 15.0
Employer Match (%): 4.0
Return Rate (%): 9
Years Until Retire: 30
Amount at Retirement: $3,417,977.25
Employee Contribution: $632,198.93
Employer Match: $168,586.38
Investment Gain: $2,607,191.95
Summary
The good news this is a 30-year plan. Many of you will work more years and accumulate great retirement savings!
LET’S GET ER STARTED, PEOPLE, AND ACHIEVE YOUR FINANCIAL FREEDOM!
The paths to financial freedom are UNLIMITED. CHOOSE YOUR OWN!
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YOUR GREATNESS IS NOT WHAT YOU HAVE; IT’S WHAT YOU GIVE! – SOME CHARITIES I SUPPORT
St Jude Hospital: The mission of St. Jude Children’s Research Hospital is to advance cures, and means of prevention, for pediatric catastrophic diseases through research and treatment. Consistent with the vision of our founder Danny Thomas, no child is denied treatment based on race, religion or a family’s ability to pay.https://www.stjude.org/
Wounded Warrior Project: An American charity and veterans service organization that offers a variety of programs, services and events for wounded veterans of the military https://www.woundedwarriorproject.org
Folds of Honor: Providing life-changing scholarships to the spouses and children of America’s fallen or disabled military. And now, our mission expands to the families of America’s first responders. On our watch, those who protect our freedoms and our families will know they are not forgotten. https://foldsofhonor.org
Wilson’s No-Kill Animal Shelter: A N0-Kill shelter that is a top-rated non-profit. They compassionatelycare for all their animals. https://wcnkas.org
Tunnel To Towers: Since 9/11, we have been helping America’s heroes by providing mortgage-free homes to Gold Star and fallen first responder families with young children and by building specially-adapted smart homes for catastrophically injured veterans and first responders. We are also committed to eradicating veteran homelessness and helping America to Never Forget September 11, 2001. https://dogood.t2t.org/give/320847/#!/donation/checkout
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https://wealthbuildingpowers.com/2019/04/01/financial-literacy-is-just-not-that-complicated-trust-me/
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ABOUT ME
I am a proud nerd (as my beautiful wife and daughter have told me) investment and finance blogger with an NC. State, Chemical Engineering, University Rutgers, MBA and Harvard University, Advanced Management education.
I left a corporate career because I desired to make a difference as a speaker and writer. I was blessed to be coached and mentored by strong women and men in my family and professional life. It is my time to serve and give back.
DISCLAIMER
I started my first business at ~13 years of age (a small but brilliantly created plant nursery). I am a successful investor in stocks, options, and real estate and am happy to share my finance and investment lessons. I am NOT a licensed financial advisor. Please do not construe my suggestions on this blog as recommendations for your situation. As an investor, you must establish your risk/loss tolerance. Investment in any asset involves risk, including complete loss.
Please seek your licensed CPA or fiduciary financial advisors for individual financial advice.
I write this weekly blog to make an impact by reaching an audience and demonstrating the need for financial literacy. I will help you get there.
