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The Motley Fool fool.com 02 Aug, 2022 10:45 am

How Many Years of Maxing Out a 401(k) Does It Take to Become a Millionaire?

How Many Years of Maxing Out a 401(k) Does It Take to Become a Millionaire?
If you need to play catch-up with your 401(k), you can reach $1 million in less than 20 years by maximizing your contributions

Also, another study found that some 25% of plan participants don't invest enough to get the full company match.Just starting six years sooner than average, at age 25, and getting the full company match can make a huge difference.If you simply started contributing 4% at age 25 and got the full company match, you would have accumulated almost $1.With the 4% company match included, they could reach $1 million in just over 17 years, just in time to collect Social Security at age 67 -- assuming a 3% annual raise, a 4% company match, and an 8% investment return.

To see what a difference a few years make, if you waited to start just five years later at age 30, now with a starting salary of about $40,000 -- you would have roughly $800,000 by age 65.Let's say that ship has sailed, and you didnʻt start contributing at age 25, or even 35, to your 401(k) plan, for whatever reason.

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