I want to get everybody talking about their retirement portfolios because making the proper net worth allocation, deciding on how often to rebalance, and running different growth scenarios matters more over time. Contributing the maximum $17,500 a year to your 401(k) should be standard. If you’re making more than $60,000 a year and not maxing out your 401(k), then you should probably give yourself a timeout to contemplate why you’re slicing off your toes.
As you can tell from my 401(k) by age chart, contributions add up quickly over time. Assuming you receive no company match and suffer no losses, you’ll have at least $100,000 in your 401(k) in six years. In 10 years, you’ll probably sock away over $200,000 and in 30 years you’ll finally reach that magical $1 million dollar mark.
The S&P 500 is up roughly 10% year to date. That’s a healthy $100,000 gain in your million dollar portfolio in three months without having to do much of anything. I’m cautious investing new money now, but the point is once you’ve amassed a sizable nut there’s no longer a need to work in a bull market – unless you are restless like me.
401k CONTRIBUTIONS AS A PERCENTAGE OF YOUR PORTFOLIO