How Hard Is It To Become A 401(k) Millionaire?

Being a 401(k) millionaire means you have roughly 10X the average amount in your 401(k) as the rest of 401(k) holders. That's pretty darn impressive, especially since the maximum contribution limit has never been higher than 2020 contribution limit of $19,500. The contribution limit goes up $500 every two years or so.

When I was first able to contribute to a 401(k) in 1999, the maximum contribution limit was only $10,000. Check out the historical 401(k) contribution chart below that also includes the hefty employer contribution portion which most people do not realize.

historical 401(k) maximum contribution limits

Here's When You'll Become A 401(k) Millionaire

Given we know the various portfolio returns based on asset allocation in my post, How Much Investment Risk You Should Take In Retirement, one can simply do a little math to figure out roughly when someone will become a 401(k) millionaire if they are starting with $0, max out their 401(k) this year and every year after, and return the average annual return of the portfolio composition since 1926.

How long it will take you to become a 401k millionaire

Of course, historical returns cannot guarantee future returns, but after a 10-20 year period of investing in your 401(k), your average annual portfolio return will likely begin to mimic the historical averages. Further, if your company provides a generous 401(k) match or profit sharing plan, then it is likely you will become a 401(k) millionaire sooner.

For those readers with more than $0 in your 401(k), simply find an online compound interest calculator and input your data for your specific results. The good thing is, all the numbers above can be considered the maximum longest amount of time it will take to get to 401(k) millionaire status in a normal market.

The Keys To Becoming A 401(k) Millionaire

I worked for 13 years for two employers and got my 401(k) balance up to ~$400,000. But once I left my job in 2012, I rolled over my 401(k) to an IRA. If I worked for seven or eight more years, I probably would achieve a $1,000,000 401(k) balance due to strong returns and great company profit sharing. But alas, I'm not a 401(k) or even a rollover IRA millionaire.

Here are three keys to becoming a 401(k) millionaire:

  1. Max out your 401(k) without fail each year.
  2. Work at an employer with a great 401(k) plan for as long as possible.
  3. Invest in a risk appropriate manner relative to your age or work experience. See: The Proper Asset Allocation Of Stocks And Bonds By Age

Nobody said becoming a 401(k) millionaire would be easy. But with the long term trend of stocks and bonds up and to the right, the key really is longevity.

What Everybody Should Have In Their 401(k) By Age

The below is my proprietary chart that highlights what most people who diligently save should have in their 401(k) by age. The chart is divided into three columns to account for different age savers t the present time and different levels of company return and company match.

401k savings targets by age
Click to learn more about the methodology

Based on my 401(k) by age estimates, older age savers (50+) should be able to become 401(k) millionaires around age 60 if they've been maxing out their 401(k) and properly investing since the age of 23. If not, then best of luck with Social Security, a paid off house, and hopefully after-tax investment accounts.

Middle age savers (35-50) should be able to become 401(k) millionaires around age 50 if they've been maxing out their 401(k) and properly investing since the age of 23. I'm expecting to be a 401(k) millionaire when I turn 50 in 2027 by contributing to a Solo 401(k) plan.

Younger age savers (20-34) should be able to become 401(k) millionaires around age 40 if they've been maxing out their 401(k) and properly investing since the age of 23.

How much do you have in your 401k?

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Treat Your 401(k) As An Insurance Policy

The funny thing about your 401(k) is that it doesn't really matter if you have millions in your account. You can't tap the funds without paying a 10% penalty before age 59.5 or doing a Roth conversion and paying taxes, so it's more like a retirement insurance policy.

Further, a better goal might be to not become a 401(k) millionaire because that probably means you spent 18 years or longer working at a day job. What you should really be doing is building up your after-tax investment account aggressively so that you can retire well before you are 59.5.

As you've only got one life to live, you might as well figure out a way to escape the grind sooner, rather than later. Not a day goes by where I'm not thankful for aggressively building a portfolio of non-401(k) investments in my 20s and 30s to have the courage to leave my 401(k) behind.

Wealth Building Recommendation

Run your 401(k) through Personal Capital's FREE 401(k) Investment Fee Analyzer to see how much you're wasting in fees. I ran mine through and found out I was paying $1,748.34 a year in fees I had no idea I was paying.

After discovering how much I was wasting on actively managed mutually fund fees that didn't have a perfect track record for beating their respective benchmarks, I switched to low cost index fund ETFs. Their Investment Checkup tool also allows you to analyze your investment risk exposure and make appropriate adjustments.

401(k) Fee Analyzer By Personal Capital

About the Author: Sam began investing his own money ever since he opened an online brokerage account in 1995. Sam loved investing so much that he decided to make a career out of investing by spending the next 13 years after college working at two of the leading financial service firms in the world. During this time, Sam received his MBA from UC Berkeley with a focus on finance and real estate. was started in 2009 and is one of the most trusted personal finance sites today with over 1.5 million organic pageviews a month. Financial Samurai has been featured in top publications such as the LA Times, The Chicago Tribune, Bloomberg and The Wall Street Journal.