Article Bookmarked
Bookmark Removed

How to Save $1 Million in Your 401(k)


May. 7, 2016 Kiplinger

Building a million-dollar nest egg is a popular goal. The trick, of course, is figuring out how to reach seven figures by retirement. You don’t need to win the lottery or inherit a fortune to get there. All you really need is time, discipline and a 401(k) account.

Employer-provided 401(k) plans are good deals for aspiring millionaires. Contributions are pretax, which lowers taxable income. Annual returns get a boost because you don’t pay taxes on the money until you start making withdrawals. As a bonus, many employers match a portion of workers’ contributions.

To hit the million-dollar mark, you need to start early. A 30-year-old making $60,000 and contributing 3% a year will save about $367,000 by age 65. But bump up 401(k) contributions to 10% of your salary, and you’ll have $1.2 million after 35 years. (Estimates assume a 3% annual raise and a 7% rate of return.)

The contribution limit to a 401(k) is $18,000 a year. But if you’re 50 or older, the maximum jumps to $24,000.

Take a look at nine more ways to make $1 million.

Read More on Kiplinger

Gene Upshaw Player Assistance Trust Fund

Apply Today

All Resources

Tell Me More

How to Deal with a Shockingly Big Utility Bill

Extreme weather can lead to changes in your utility bills. Be patient and take action.

Read More

6 Easy Ways to Simplify Your Financial Life

Straightforward ways to master money management.

Read More

How to Get Out of a Bad Co-signing Situation

Keep in mind moost co-signers are family members. Take the right steps.

Read More

What Causes a Credit Card to Stop Working?

From maxed out to an error in the billing address. There are plenty of reasons.

Read More

10 Odd and Fun Activities That Keep Your Brain Healthy

Recent research highlights these surprising ways to protect your brain.

Read More

Personal Boundaries: Privacy and Personal Space in Pandemic

What to do when the pandemic steals control of your privacy and personal space.

Read More

A CEO’s Guide to Planning a Return to the Office

Today’s decisions will set the tone for the future.

Read More

Plant-based diets reduce risk of heart disease, dementia, study finds

What does it mean to go plant based?

Read More