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I know I read this stats from Places like Fidelity that claim the average 401k balance is more like $100,000 than one million.
But when I read the stats it is only by account, not by person (could have more than one 401K) have or spouse could have 401k(s).
For instance I have a Fidelity 401k. I also have two 401ks from prior companies and my wife has a 401K.
All Fidelity sees is the one 401k. And that only is one of my 401Ks Also married couples live off two 401ks, not one. So how does it make sense to say do I have enough to retire based on my 401k.
All combined I (we) have over one million in our combined 401Ks.
Is that fairly common?
How many folks at or near retirement have over one million in the combined total of their 401Ks.
How many folks at or near retirement have over one million in the combined total of their 401Ks.
Yes, it's fairly common, even for non-professional wage earners. I know schoolteachers with nonprofessional spouses who have managed through years of frugal spending and disciplined saving managed to accumulate 7 figure nest eggs. Employer matches, stock sharing, decent interest on CDs and savings bonds, and mutual fund growth ca 1970-present were all critical factors.
edit to add: I'd think it's much more common though to have 100k or less in combined funds.
Quote:
Originally Posted by NYgal2NC
If I had it in my account, do you really think I would tell it here??
I didn't read the OP's question as who HERE has it, rather just wandering how many in the general population do.
I agree that I am not comfortable with discussing balances in more than a general way, but there is an interesting point in the OP's post. I have more than one account. I rolled previous 401ks into IRAs and I bought an insurance product before I knew better but hung on to it as I had gotten to the point where it has value, plus I may have more equity than I will use when I downsize. So a single account balance, even though one is much bigger than the rest, does not tell the story.
Another interesting thing to think about - if you have a million dollars that is all tax deferred, how much do you really have? If you pull it out too fast, you will get hit pretty hard on taxes.
Another interesting thing to think about - if you have a million dollars that is all tax deferred, how much do you really have? If you pull it out too fast, you will get hit pretty hard on taxes.
That was my thought. If you have pre and post tax savings and investments you have more control over taxation. Taxes can eat a huge chunk out of pre-tax savings.
The desireability to have that much depends on where your sources of income are expected to come from. Also a millon in pretax is far less than a million in a Roth, so it's all just shock journalism, really. What counts is income.
Another interesting thing to think about - if you have a million dollars that is all tax deferred, how much do you really have? If you pull it out too fast, you will get hit pretty hard on taxes.
Exactly. Every time we look at our non-deferred account balances, DH & I mentally subtract 25%.
That's one reason we're converting to Roths as fast as we can, we just don't feel comfortable putting off that tax burden.
The desireability to have that much depends on where your sources of income are expected to come from. Also a millon in pretax is far less than a million in a Roth, so it's all just shock journalism, really. What counts is income.
Haha, we're all on the same page
But you through in an interesting wrench - income. Lets say you are able to get 5% return on that million and you can live on $50,000 total income. Then they are both the same, right? Except it cost a lot more during your working years to accumulate the Roth money. I could be wrong though. Isn't Roth appreciation taxed on withdrawal?
No Roth Money goes in as After Tax money, It all comes out tax free.
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