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I’m a soon to be 41 year old female and according to everything I’ve read I should have about 400k in my 401k. I guess I’m very behind because I only have 89k. I started contributing when I was 25 and I’ve never had high paying jobs. I also only contributed around 3 to 5 percent and worked for companies that matched. I didn’t even have a salary of 50k until 2012 before that I was making 40k something. 2 months ago I got a job that pays 70k but I am in the process of rolling over my 401k. I am flabbergasted that people my age have 500k in their 401k my husband has a pension plan with his job. My previous job had a pension plan and I see I have another 30k in there that will continue to grow even though I don’t work there anymore but I can’t really touch the money until I’m 65
I’d like to be more aggressive with saving into my 401k but I have a 3 year old and 5 year old so I feel like I need money now.
The other thing I do which is probably dumb is I save money in my savings account. I have 71k just sitting there in case of an emergency. Is there anyway to roll that into a 401k?
I thought I was doing ok by even having a 401k but I am kicking myself for not contributing more . But again I am not someone who’s had high paying jobs and I do think these are the typical people who have 400k at 40. How could this be the average that 40 year olds have saved?? Maybe 40 year olds in NYC?
Last edited by Bridge781; 06-18-2019 at 07:20 PM..
Reason: /
You can effectively "roll" the money in your savings to the 401k by increasing your contribution to the 401k and living off the money saved.
I don't think the average 40 year old has $400k. The average 401k balance is quite a bit less than that. You are doing ok, I mean not really great but for your income level pretty good.
You got a raise from $50k to $70k, why not just live like you were before while putting that $19k max a year into the 401k?
That is how we did it. As incomes grew we kept living like we did before the income growth.
I just can’t help but feel like I should have more in my 401k. 15 years of contributing and I only have 89k. Ugh.
Well, you should. But most people prioritize their lifestyle over saving. I did a time value calculation right out of college and knew each dollar I put in would be worth $4 when I retired. That was what motivated me to shove as much as possible into retirement and investment accounts and drive an old crappy car, and live in a starter home.
What has your 401(k) money been invested in? It's not enough to just put money into your 401(k) plan, you have to invest it in things that can grow your money.
I have no idea what it was invested in. A fidelity 401k account.
You really need to find out what your money has been invested and what other investments are available to you. Unfortunately the down side of 401(k) accounts is that it puts the onus on the employee to make the investment decisions. Your company and Fidelity no doubt give you educational materials, but it's up to you to decide what investment is right for you.
I have no idea what it was invested in. A fidelity 401k account.
So how active have you been about your investments and retirement ?
Did you just have money deducted from your paycheck and that was it ?
Did you treat that 401K like a savings account..deposit and forget ?
If so then you need to start learning about investments.
If your 401K is at Fidelity then log in and start educating yourself on 401K and various investment choices.
Be default employers usually choose the most conservative investment which makes you the least amount of money.
Average 401k for a 40yo is nowhere near $400k. I would wager you are closer to average. The fact that your husband has a pension is huge, but I would start contributing more aggressively. Your company should have a financial advisor managing the fund available to help you pick funds based on your goals. You should set up a meeting with that person. Regarding the $71k in savings, I would find that a bit excessive. Once you get past a 6 month emergency fund, you should be investing it in some way IMO (retirement, real estate...). You could also starting funding a Roth IRA in addition to your 401k. You can contribute up to $6k/yr after taxes and when you take it out it is tax free.
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