The 401k has always been a curious system because on the one hand, it’s better than a sharp stick in the eye, but on the other hand, it’s simply not enough to retire on given the $18,000 cap on annual pre-tax contributions for 2016. In fact, I was so jaded by the 401K system that I recommended everyone max it out, but mentally write it off like I do social security. This way, you are forced to build your “real” savings and investments with your disposable income.
Recently, I got a kick in the pants when a 57 year old financial adviser named Larry told me he has over $5.5 million in his 401K! Holy crap, I thought to myself. How the heck did he accumulate so much, just in his 401K? The answer was simply longevity, performance, and company match.