My Only Regret In Life: Speed To A 401k Millionaire

Time it takes to be a 401k millionaire

This article was inspired by Rob over at Mustard Seed Money.  He recently wrote about a friend of his that expected to retire with more than $1 million dollars in his 401k.  This prompted Rob to do a little research.

He was curious to see at what age the typical 401k millionaire reaches that milestone.  According to a Fidelity Investment report, which reviewed over 15 million Americans who have accounts with them, they reported some interesting statistics.

On average, women achieve the status of a 401k millionaire at the age of 58.5. Meanwhile, the average man achieves this status at 59.3.


The Fidelity statistics led me to a new thought.  If 59 years old is the average age to earn 401k millionaire status, what is the gold standard?

In other words, what should we compare this age against?  How fast can it be done?  And, this leads me to my one money regret in life.


Okay, if you pressured me, I could probably come up with a few more regrets.  Those few things I would have done differently to attract money into my life.  Hindsight is twenty-twenty, as the saying goes.  But, for the sake of keeping this blog post at a manageable length, I will keep it to just one.

I regret not maximizing my 401k contribution as soon as I started my post-college professional career back in the mid-1980s.  Retirement accounts are a great way to become a millionaire investor.  I was a newly minted CPA working at a Big 4 public accounting firm.  Making the big dough and living the big city lifestyle was great.  But, I did not maximize my 401k contribution back in that day.


Thinking back to that time, I can come up with lots of reasons why I didn’t maximize my 401k contribution:

  • 401ks were not all that popular in the mid-80’s; most companies still offered defined benefit pension plans
  • Renting an apartment and living the big city life consumed most of my salary
  • I saved some money outside of my 401k wanting quick access to my funds
  • I was an idiot and wanted to party like a rock star.


Let’s get on to the point of this article.  If the average person achieves a million dollars investing in their 401k at about age 59, what is the gold standard?  How fast can it be done?


To figure this out we need a few good assumptions about a money plan.  Here they are for a newly minted 2018 college graduate.  We will call him Tom Junior or just Junior for short.

Mrs. DD and I do not have any children.  But if we did, we think Tom would be a nice name.  The picture below represents what Tom Junior might look like.  We know Junior got his keen intelligence from Mrs. DD.  We are not sure where he got his manly good looks and six-pack abs.  Tom Senior keeps his six-packs in the refrigerator.

young man pursuing financial independence

Okay, seriously now, here are the assumptions we will follow for the fictitious Tom Junior.

  • 22 years old and earns an average annual starting salary for a college graduate of $50,000.  This is based on a 2017 study by the Hay Group
  • The salary grows by 3% per year
  • He contributes the maximum allowed to his 401k, $18,500 for 2018.  This is a lot to Junior, but he’s only out of pocket less than $14,000 because of the pre-tax nature of the contributions
  • Mrs. DD and I have an agreement with Junior.  He can live at our home rent free and be on our health care plan in exchange for his agreement to maximize his 401k contribution 
  • There is just one house rule.  Junior must not touch his father’s beer; it is strictly for his Dad’s medicinal purposes
  • Junior’s company contributes 3% of his base salary to his 401k account each year
  • The government increases the maximum allowable contribution by 1% each year, and junior increases his contributions by that amount
  • Let’s be conservative and assume Junior earns investment returns of just 7% annually


Now, let’s see if Junior will capture wealth as we have defined it.

I plugged these assumptions into a spreadsheet and determined junior could be a 401K millionaire at about age 42.  That’s our gold standard, my friends.  Our speed to a million, if you will.

One more interesting point.  At the age of 42, junior is only out of pocket a little over $320,000 to build a $1 million at a young age.  Why?  The company contribution, the tax break from Uncle Sam and the investment returns make up most of the $1 million.  It is clear now that junior’s employer, the US government and the financial markets are doing most of the work.  That is the beauty of the 401k!


  • Do you have children and could you get them to agree to this arrangement?
  • Are you in your 20’s?  If so, what do you think of this plan?
  • Am I crazy to believe anyone would think about doing something like this?
  • What regrets do you have?

Leave a comment, join the conversation, and let us all know.

And, if you liked this article on investing techniques, you might enjoy some other wealth-building gems here:

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401k millionaire

46 thoughts on “My Only Regret In Life: Speed To A 401k Millionaire”

  1. I don’t know if I could but maybe I should try…not sure about the rent free part!
    Most of my regrets have nothing to do with money, but I did make lots of money mistakes!

    • Hi Caroline, If I remember correctly, you have 3 outstanding prospects for this exercise. And, once a landlord, always a landlord I guess. It doesn’t surprise me you would need to charge a little rent! Tom

  2. Nice article. Like you said given the situation our decisions where the best we could do. Retrospective thinking leads to nothing useful. I think your assumption for 7% ROI is very aggressive. I would use 4%.

  3. I think this sounds doable. I’m not an economist so I’m going by experience here but, as long as you avoid over-shopping, a well-educated young’un with a well-paying job should be able to maximize retirement contributions and still live well. Rent (or buy) in a “gentrifying” neighborhood, drive a cool-but-reasonable car (if you even need a car), and control spending.

    Of course, this is easier said than done. I manged to save in my 20s, but nowhere near these goals. And despite over a decade of efforts, I still don’t have the six-pack 🙂

    • Hi Miguel, The six pack has always been very elusive to me too. I’m much better putting my money through aggressive work outs to make sure it stays lean and mean. Tom

  4. This is definitely possible and I know other PF writers whom have graduated college and are contributing the max, I wish I did, but I am trying to play catch-up now. What you’ve described is a great formula to help kids save. In the long-run, they will thank parents for making them do this and truly understand the power of time and compound interest.

    • Yeah. I like the way you think SMM. The 401k is such a powerful tool, I think parents would be wise to think about this option. I had to play catch up too, but at least we got into the race before it was to late! Tom

  5. Tom, thanks for the laughs this morning – really good post. Dividend FIREman loved to spend in his early years, and thus did not take full advantage of this wonderful saving vehicle. But in the category of “those who can’t do, teach,” I’m proud to say that my 23 year old son is contributing the max at his Dad’s urging.

    One of the fellows who works for me started contributing the max at age 24. He made partner early, and thus became eligible for profit sharing earlier than most. He maxed out those contributions as well, but even with those additional contributions, he still is not a 401k millionaire at age 38,

    Returns will likely be muted for the next 10 years, but I don’t think a 7 percent return assumption is overly aggressive for a longer term investor. like the one in your example.

    • You had a FIRE hose of cash when you were younger, it was just running the water in the wrong direction, like me. Congrats to you and your son. Very forward thinking on your and his part. Your friend still has 4 years if we are talking about a 20 year process and remember the contribution limit was not as high when he started. He also got started a few years before the bear market which had to slow him down a bit. You are right though, returns may be muted the next few years given the run we have had since 2009. Glad you had a laugh. Tom

  6. Good thought exercise for the day Tom. Not sure JR would want to stay home with mom and pops until 42 though. I did move back home for about a year after college while getting my first IT job out of school. I was able to save up a good amount to get a decent start at life. After that year, I was ready to roll on my own. I would be more than happy if our child wanted to do the same.

    Funny about the beer in the fridge 🙂

    • Agree Mr. DS, Jr and I would probably be on each others nerves after a few weeks. At least what I read, a lot of the millennial generation have had extended stays at their parent’s home after college. So I figure, why not make it pay off some way. Tom

  7. I am sure we all have regrets and should of done things different or better. My kids are just starting post secondary but I will be preaching to them about maxing there registered accounts when they start there careers. Millionaire at 42 is a nice goal !

  8. Hey Tom, the earning and investing portion of your example is very plausible. A way to sub out having to live at home is if you get married and have two salaries utilized to build that rolling snowball. Getting to a million will happen eventually if you save and invest, it’s a matter of when.

    • Hello HP, Yes. That is an interesting twist on my example, marriage that is. The kids, of course, can’t live at home forever. It was just my way to help them get started. Easy for me to say, having no children. Thanks for stopping by and commenting. Tom

  9. Enjoyed this post Tom.

    Hey, so I’m like you, no kids. But if I did have a junior, he/she wouldn’t be living rent free. They would have to do chores at home and earn that rent or pay with a part-time job. That I can tell you.

    Once they reach a working age, they would have to go and earn some money, part-time is fine. But they need to learn value of hard work and commitment.

    Well I didn’t have a rent free living, but I did get a early start in my career which allowed me to make more money and save more when I was still in my early twenties.

    For the first few years, I only contributed enough in the 401k to match company’s contribution. But like you, I got wiser and started to max out.

    I think reaching a millionaire milestone by 40 is very achievable, but takes work and some smart decisions.

    • Hi Mr. ATM, For some unknown reason I thought you had kids in college??? It sounds like you would be a good Dad anyway and instill a strong work ethic and sense of responsibility in your children. Good qualities to have in life. Have a good evening, I gotta go teach my college kids financial accounting tonight. Tom

  10. “Tom Senior keeps his six packs in the refrigerator.”

    Yes, but I assume you’re referring to the protein shakes that fuel your other six pack? I’ve found that one six pack often contributes to another…I finish one eventually and then need to go get another 🙂

    Overall, it is interesting how quickly one can potentially accomplish this based on the assumptions you’ve highlighted. Starting early is key. I also think consistency can be the difficult part. – Mike

  11. Hi Mike, Yeah. I love a good protein shake. Now I’m thinking investing is like exercise: start early and stay consistent whether your are building your investments or six packs. Tom

  12. I’m going to be contributing to my 401k and IRA as long as I’m at my job.

    This year, at 25, will be my first year of completely maxing it out! I’m at about 25k in there and am on pace for 40k by the end of the year. I’d love to have that get to 100/150k by the time I’m 30 (through contributions), so that I can set myself up for better days ahead.

    Thanks Tom.

  13. I think Junior and Mr Compound Interest can be BFFs… they got some of that 6 pack going on there… they can even be BFF workout buddies 🙂

    Nice post you have here!

    You say you regret. But either way, it sounds like you still hit the gold standard yourself even though you didn’t take advantage of the 401k back in the days!

    I’m guessing you’re saying that you would’ve been even better off had you started contributing to your 401 earlier. Am I right? lol.

    And yes, I know you’re trying to get this message across to the younger generation. If only I had this kind of lesson when I was still in school! Ah well, I guess some of us just have to learn it the hard way.

    The good thing, however, is that I was able to live rent-free with my parents after I was done school. As a token of appreciation, I would take them out take them out for dinner and buy them stuff that they liked and they couldn’t afford.

    During that time, I saved and invested, but I think my investment style could’ve been better…. I didn’t know what I was doing at that time with my investments lol!

    • Hi Ms. Panda, Junior can’t have to many BFFs from my standpoint and compound interest would definitely be one of them. Didn’t we all learn the hard way when we were younger and knew everything? I bet your parents appreciated having the little Panda around the house! Tom

  14. You make a compelling argument for starting early! And even if Junior lives at home only a few years, you’ve set him up with a good foundation. If he chooses living quarters wisely, and shares with friends, he can continue on the path. So maybe he’s a 401K millionaire by 48 instead of 42. Not so horrible to me.

    • Yeah. You got the point Mrs. G. It might not be 42, but it certainly doesn’t need to be the current average of 59. The tax deferral and company contributions make such a big difference in compounding the balance. Thanks for commenting. Tom

  15. That’s a nice photo of hypothetical Tom Junior! Great analysis but I think that living at home until age 42 would NOT be attractive for any potential love interests for Tom Junior!

    Even if he moves into the basement! haha 🙂

    Thanks for sharing the Fidelity stats- they are interesting. Interesting that women seem to achieve it earlier than men! Though there are probably lots of assumptions with that data too.

    • Yeah GYM. That might be a problem. I was thinking he would move out after a few years as his salary grew. While he is at home, I am in charge of approving all potential girl friends. Tom

  16. Our ‘401K equivalent’ system is slightly different here in Australia, but still an amazing way to save for retirement. I wish I had the foresight and understanding back then to do the same, instead of spending my few after-tax dollars on some speculative stock investments in my fully-taxable account…..

    So I’ve only got 2 years left to hit the gold standard? I may be settling for bronze… my kids will certainly be learning this much earlier than I did and getting a good head start!

  17. Haha I am 27 and see many of the people I know continue to party like rockstars!

    Someone super determined could do this in theory. I feel like I was on top of it coming out of school and in a good position. Limited debt 13K and immediately dove into saving.

    The reality for me was we bought a house and then started to really sock it away. For the first year I was pumped to max out an IRA. Then the 401k came. Now I invest in taxable and have paid down a bunch of my mortgage.

    So 401K only millionaire I think would be pushed back. Yet I think millionaire across all investments is achievable way earlier! The smart decisions I made 5 years ago have changed my life and the way I am able to save now.

    *I also graduated at 23 because I took a year off before college to travel.

    • Thanks for your story DM. I can relate to it. I’m in my early 50s and still am not a 401k/IRA millionaire. Until the last couple years, I always chose to only contribute the small amount necessary to get the maximum company match. But, like you, focused on paying down debt, and investing heavily in taxable accounts. Thinking about it this way, my regret now is mainly not having the money in tax advantaged accounts away from our high spending governments reach. Versus not achieving my financial goals overall. Tom

  18. If the navy had had a matching TSP when I was in I think they now match up to 5 percent I probably could have been close to a millionaire TSPer when I retired but they didn’t and I invested irregularly on and off till 08 then I started hitting it hard. I’m debt free but not a millionaire if I become one I become but no matter what I want to try to live off my dividends first before touching any other income when I do decide that then whatever is left at the end of the year invest it lol. My goal is to see how much of my retirement I can replace with dividends

    • Hi Doug, Thanks for commenting. Tax deferred saving is great and if could do over I would max it out. But I’m with you on the dividends. Focus on building them up until you can live off of them. You have a solid 10 years under your belt hitting it hard starting in 2008 at the bottom of this stock market cycle. Keep it up. Tom

  19. Hey Tom. I recall putting enough in my first 401(k) to get the match. I also did some investing in a mutual fund in a taxable account at that time – Fidelity Puritan was the investment I had back then. As you can tell based on that choice, I was a little conservative compared to today, but I was just learning how to invest. The bottom line is that I got started with investing.
    I don’t think I could have maxed out my 401(k) at that time, as it certainly didn’t seem like I had lots of extra cash thanks to the 401(k) investment, the taxable acct investment, and saving for a house in those years, too. So, I guess my only regret was not earning enough to allow me to invest more!

    • There you go ED. I think most of us have that regret. Not earning enough money, that is. Thanks for stopping by. Tom

  20. I think that’s the one regret of a lot of people. Not being able to start earlier. I too wish I was able to max out my retirement account at a younger age. But, between low income and high debt, I wasn’t able to do that. But, hindsight is 20-20 and I’m far more mature than I was before. I’m just hoping it’s not too late.

  21. Not starting sooner is one of my regrets indeed. I didn’t really think about finances until more then two years ago. But I’m hopefully making up some lost time by doing it now.

  22. As someone who has graduated college somewhat recently, I’d say that your plan is solid.

    I only started contributing to a 401K about two years ago, but I’ve already seen serious gains on top of my contributions. Well worth the effort!

    • Hello Elle, Good for you! Starting early is half the battle and it seems as if you are off to a good start. Keep it up. Tom

  23. This is a GREAT post!!!!! I was maxing out at age 26. I stopped for 15 years. Recently, I sold pretty much everything in my life. You can read about it here: I am now back on track with $30,000 per year and next year I will try to bump this up to the full $37,000 as permitted. I think I can do it in about 10 years or sooner. I am a third of the way there now.

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