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we are at 1.75 million in our ira but yes it is from 401k's rolled over, over the decades .
You're also not 39 though!
Most people at 39 haven't rolled that many 401ks and even if they have, usually between the age of ~18-30 it's not super likely they're funding it 100% because they're in college, paying down debt, and slowly ramping up a professional salary. So even if you have $50K to invest from a rollover IRA at say 27 after you quit your first job, growing that 10x in 10 years is bonkers. Meanwhile the remainder of your money is growing at most 8-12% in one's current 401K since you can't pick individual stocks.
I'm not saying it can't be done but to do so would take way more balls than I've got. It would mean like putting 50% into AAPL at age 35 when you already have a sizeable nest egg. I was willing to do that when I was young and dumb. Bought super concentrated positions in AMZN, AAPL, FB and absolutely crushed it. But that's one thing to do with your NW is $10,000 and you are making 40K a year. If those crated I could earn it back in a few years. Now there's no way I would 20% into a single position.
You're also not 39 though!
Most people at 39 haven't rolled that many 401ks and even if they have, usually between the age of ~18-30 it's not super likely they're funding it 100% because they're in college, paying down debt, and slowly ramping up a professional salary. So even if you have $50K to invest from a rollover IRA at say 27 after you quit your first job, growing that 10x in 10 years is bonkers. Meanwhile the remainder of your money is growing at most 8-12% in one's current 401K since you can't pick individual stocks.
I'm not saying it can't be done but to do so would take way more balls than I've got. It would mean like putting 50% into AAPL at age 35 when you already have a sizeable nest egg. I was willing to do that when I was young and dumb. Bought super concentrated positions in AMZN, AAPL, FB and absolutely crushed it. But that's one thing to do with your NW is $10,000 and you are making 40K a year. If those crated I could earn it back in a few years. Now there's no way I would put more than 20% into a single position.
yes , i am along way from 39 ... this took many decades to get to that level
How on earth do you have 900K in a traditional IRA? That's not just from IRA contributions, right? That's from 401K balances at previous job(s) that you rolled over?
Personally at 39 I'd want 0 dollars in my traditional IRA. In fact my wife had like $40k in hers and we just rolled it into her 401k so we could take advantage of the backdoor Roth. We also discovered she has an option for a mega backdoor of an additional $10k of her income that then can get an in-service distribution to a Roth. So moving forward we'll be putting $22k/yr in our Roth's as well as maxing out our 401ks and HSA.
Income varies, wife is ~$170k with bonus included, mine is in the $200-$220K+ range for my business but I also rehab houses which means it will usually be more.
Household NW is in the $2.8M range, after conservatively valuing my rentals. This has been accumulated largely through real estate and nice employment/business income and saving. I've always lived well below my means and was even a saver in college which I worked through (graduated with a master's and 25k in the bank and a townhouse with a roommate).
I feel that to enjoy retirement how I want and where I want, I need a $7-8M NW. I'm not going to rely on social security or my wife's small pension, and the plan is to retire before 55, so even with a decent NW we aren't spending like crazy but do live well.
Update from April 2019. I am now almost 46, wife just turned 40. We are now at $3.77M after once again conservatively valuing our rentals and deducting reasonable closing costs. It was almost a $1M gain in NW in a little over 1.5 years. Where all of it came from:. The rentals we have (up to 7 now) have increased since the pandemic began, our stocks and mutual funds have increased and I've had a few home runs in short term individual stock trades, wife's bonus and stock options and in general living well below out means as I mentioned above. My business income is up more than 25% since 2019 and my wife's salary is up about 6%.
We'll see what the housing and stock markets do going forward, I feel like my numbers could be hanging by a thread and could go down sharply with any bad economic or pandemic news, but at 46 I still have a longish investment horizon and can withstand a drop if it happens. We still keep a larger than average cash balance for opportunities when they arise, whether that's real estate or stocks.
How on earth do you have 900K in a traditional IRA? That's not just from IRA contributions, right? That's from 401K balances at previous job(s) that you rolled over?
Mainly luck
I was at my previous job for 9 years. Left in march 2018 with 337k. Rolled it over to a traditional IRA. A year later I rolled 37k of it into a roth IRA and paid taxes on it.
Today there is 844k in the traditional and 135k in the roth account.
I also had another job before that where i left in 2009 with 40k in there. Rolled it over to a traditional and let it grow for a few years untouched, and then i split it into a traditional and a roth earlier this year.
Those two accounts today have 175k in traditional and 47k in roth.
These are aside from my regular roth account and my wife's roth which are 179k and 97k respectively.
Last edited by Thinking-man; 11-20-2020 at 11:52 AM..
Update from April 2019. I am now almost 46, wife just turned 40. We are now at $3.77M after once again conservatively valuing our rentals and deducting reasonable closing costs. It was almost a $1M gain in NW in a little over 1.5 years. Where all of it came from:. The rentals we have (up to 7 now) have increased since the pandemic began, our stocks and mutual funds have increased and I've had a few home runs in short term individual stock trades, wife's bonus and stock options and in general living well below out means as I mentioned above. My business income is up more than 25% since 2019 and my wife's salary is up about 6%.
We'll see what the housing and stock markets do going forward, I feel like my numbers could be hanging by a thread and could go down sharply with any bad economic or pandemic news, but at 46 I still have a longish investment horizon and can withstand a drop if it happens. We still keep a larger than average cash balance for opportunities when they arise, whether that's real estate or stocks.
If I were you I'd cash out now, sell everything and retire a happy man the rest of my days. Never have to work again. Buy a couple nice houses. One a nice secluded cabin on a lake in the mountains somewhere, and one a house on or near a beach. Live the good life, my friend. You have more than enough to last you the rest of your days, and life is short.
If I were you I'd cash out now, sell everything and retire a happy man the rest of my days. Never have to work again. Buy a couple nice houses. One a nice secluded cabin on a lake in the mountains somewhere, and one a house on or near a beach. Live the good life, my friend. You have more than enough to last you the rest of your days, and life is short.
I disagree that we have enough for the lifestyle and location we want, we're about half there. Google "Laguna Niguel real estate" and you'll see why. I grew up in that area (wife not far from there either) and the plan is to return for retirement. Figuring the housing costs plus taxes, vacations, health care etc we will need more than we have to live off interest and leave the balance to our kids.
I don't mind working for now anyway, I'm self employed and generally enjoy it. Problem is it would be tough to move to California and do what I do because all of my contacts are in AZ real estate development so I want to be "set" when I return
I am trying to reach $1M in net worth but it's hard. I think the first million is the hardest. The worst part is due to skyrocketing inflation when I get to $1M the new standard is going to be $2M so it's a never ending game of catch up... the goal posts keep going further and further apart....
I hear all these pundits giving advice saying if you save just $x/month you could have a million by this age etc. What they fail to mention is that a million 30 years later will not be worth anything.
Heck, a million used to be worth something, today it isn't worth very much. I could not even buy a decent home with it in many metro areas. However a million is still very difficult to achieve yet has little value. I save an insane amount of money into my portfolio each year yet I still am a good bit away from a million. I figure it will take me 3 years to hit $1M but given the high inflation of today I will need $1.5M by that time.
I am trying to reach $1M in net worth but it's hard. I think the first million is the hardest. The worst part is due to skyrocketing inflation when I get to $1M the new standard is going to be $2M so it's a never ending game of catch up... the goal posts keep going further and further apart....
I hear all these pundits giving advice saying if you save just $x/month you could have a million by this age etc. What they fail to mention is that a million 30 years later will not be worth anything.
Heck, a million used to be worth something, today it isn't worth very much. I could not even buy a decent home with it in many metro areas. However a million is still very difficult to achieve yet has little value. I save an insane amount of money into my portfolio each year yet I still am a good bit away from a million. I figure it will take me 3 years to hit $1M but given the high inflation of today I will need $1.5M by that time.
Hyper inflation? We are retired going on 6 years and still have not taken an inflation raise ..somethings went up and some things down
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Live the good life, my friend. You have more than enough to last you the rest of your days, and life is short.
