r/Retirement401k

60 years old. Have $1.5 million on my 401k. Last year I made more in my 401k than by salary. Imagine if I had that at 30 or even 40. Rich grow richer by making their money work for them.

How far in were you? 14 years for me.

I was looking at my 401k marveling over the fact that it has smoked me in earnings this year making ~$410k YTD. I wondered when this first happened.

My base salary is ~$135k currently. I started my 401k in 2005.

In 2018 I was negative. Down $53k that calendar year. The first year it made more than me was 2019, so 14 years in. That year it started at $583k and made $166k. It ended the year at $785k.

In 2020 it did it again, gaining $192k and it was the year my 401k broke a $1M. 2021 too, making $189k.

2022 humbled me losing $321k and dipping my total back down under $1M ($947k).

2023 I gained most of 2022 back, up $311k.

2024 I was up $393k

2025 I was up $325k

So certainly thanks to the bull run of the century, my money on average has made more than me per year since 14 years in and for the last almost 8 years.

TLDR: 14 years in my money has been making more than I do. How long did it take you?

Situation

Age 40, spouse (earns ~$24K), son age 10. Household income is mostly mine (~$130-140K).

Goal: stop working at 45 or take on less stress work if I have to.

Expense: Approx 75 - 80K / year.

Assets (approx.) :

401k = $827K

Taxable brokerage = $182K

HSA (invested) = $105K. Total = 113K

Cash/CDs/HYSA = $130K

Roth IRA = $42K

Investable total = ~$1.28M

Not counted: a 529 with $65K, and percentage in few shared properties.

Current allocation:

401k: That's 90% stocks ( snp500, large cap, world markets etc) and 10% bonds.

Brokerage: voo, schg and vxus, plus some legacy single stocks. Plan is to fund minmium 200 - 250/ week for another 5 years if possible.

Roth: VOO, SCHG, SMH, VXUS, maxed each year.

Plan:

- At 45, start a 72(t) SEPP on the 401k to bridge to 59½.... this seems very risky due to time horizion till 60.

- Fill the rest of spending from the brokerage, the Roth (contributions only) and the HSA.

- Claim Social Security at 63

My own Monte Carlo (10,000 runs, simplified): at $75K/yr, about a 79% chance the money lasts to 95. Assumptions: 8.5% return on the 401k, 7% on liquid assets, 3% inflation.

Questions:

If you are in same situation or has passed through same scenario...

1. Is a ~79% success rate over a 50-year horizon acceptable, or should I work 1-2 more years? Do you use guardrails or a variable spending rule?

2. Would you size the SEPP smaller than my full spending need to stay in a better ACA subsidy tier, and fill the gap from Roth and brokerage?

3)SEPP vs a Roth conversion ladder for a 45-year-old. Am I missing a better bridge?

4)How do you handle family health insurance costs from 45 to 65, given the post-2025 subsidy cliff? what are the options for health care?

5. Is 10% bonds plus $130K cash enough to protect against sequence risk in the first 5 years?

6. For FIRE planning, is a 3.25-3.5% withdrawal rate the right benchmark for a 50-year retirement?

7. What is the withdrawal % of portfolio are you considering or considered? Given it needs to work for 50 years from 45 to age 95..

Appreciate any input and feedback.

I’m 36 years old and have 11k in a 457B plan that I started about 3 years ago. I plan to retire in about 4 and a half years at 41. I’ll receive an annual pension of 55k. I will have to pay federal taxes only on that and monthly health insurance of about $500.

I hope to get around 50k in that plan prior to retirement so I will be increasing my contributions soon.

I have about 180k equity in my house in the North East.

The goal is to sell and go South and buy in the price range of 280-300k. I hope to get a 15 year note and pull my 403b in a tax free state to pay down the house and have the smallest mortgage possible.

I also receive about 1300 in veteran benefits.

I’m looking for feedback at where I’m at regardless of it being positive or negative.

Have a small business and signed up with a 401k provider six or so years ago to manage a retirement plan for myself, my partner and our employees.

They offered dozens of low-cost funds from Vanguard to choose from and it would automatically rebalance as contributions and dividends came in. I set mine up like this:

VTSAX @ 55%
VTIAX @ 20%
VITAX @ 15%
VGSLX @ 5%
VBTLX @ 4%
VTABX @ 1%

Might not be to your taste but that’s what I did and I was happy. It was low cost for us and our employees and you could set it and forget it.

Fast forward to last year. A new company swallowed our 401k provider and then this year a new company swallowed them.

The latest one automatically sells all of my holdings (and that of my employees) and invests 100% in their own Target Date Fund. Mine was called LifeCycle Select 2045 with a very opaque summary that says:

Equity 54%
Bonds 5%
Cash 1%
Other 40%

The YTD, 1 Year, 5 Year, 10 Year performance metrics are all blank. It just says Inception to Date Return is -0.84% but I think inception must be like a few weeks ago.

So I have no idea what’s in this fund, and have no interest in investing in it, but when I see what the other options are, it’s 29 random funds that I don’t really understand.

Should I just can this new company and find another? That seems like a pain, and I don’t know if I’ll find another one that’s better — the one I liked got bought.

Is the LifeCycle target date fund actually decent? I can’t figure out what’s in it, though they say the expense ratio is .06 which is probably similar to the average of my previous investments.

Is it worth piecing together something from the 29 “Invest on Your Own” funds? I don’t know how to share them here but it’s 5 Black Rock funds, 2 Int’l Fidelity funds, 3 Vanguard funds (none that I used to invest in tho), a dozen LifeCycle funds (2015-2070 in 5 year increments, and then like 7!other random options).

Any thoughts would be much appreciated.

For a 401K, I understand that as of this year, any catch up contributions need to be Roth. At the beginning of the year, I calculated the percentage mix I needed to max both traditional and my catchup Roth - ensuring I would finish the contributions in my last, and get my full company match.

This past paycheck, I noticed my deductions had changed and my mix was reversed (this turns out to be a coincidence). My payroll department is saying that because I reach the combined 24,500 limit, all subsequent contributions will be directed to Roth until the catchup is maxed. At which point , they would then revert back to my previous settings.

First question, why would they do it this way, given I had not maxed out either limit yet? It had an impact on my paycheck because of the tax difference.

Next, if I didn’t take any action at this point, when my designated mix resumes, it would be directed in a final mix that I definitely would not want. Am I correct to just change my mix now to ensure the rest goes back to traditional?

Finally, at the same time, I notice that my employer match mix has changed. Even though I had a mix of Roth and Trad up to this point, it was previously all going to traditional bucket. Now, my paystub shows a portion of the last match has started going to into what is labeled as “R 401K match”. Is this right and wouldn’t it have tax consequences for me at year end?

Thanks for your internet input and expertise.

I’ve been investing in 401Ks for almost 20 years (had a lot of jobs but always rollover) and just realized you can invest in ETFs instead of just a target date fund based on when you want to retire. Thinking of moving my money into some market tracking funds with better returns and a bit more risk since no cash or bonds.

Any opinions on picking your own 401K investments?

Like the subject says, how do I know if I'll have enough for retirement? I'm 34 F, husband is 38. He has about $200k in his 401k and I have about $50k. We're in Colorado Springs and plan to stay put. Together we make just under $100k with no debt outside of our mortgage. We are aggressively paying off our mortgage while still investing into retirement funds, but I have no idea if we're in a good spot or if we need to step it up.

Would talking to a financial advisor be helpful?

Thanks!