401k: am I doing something wrong
I’ve been with my current company over 8 years. I’ve maxed out my 401k, plus catch-ups. Yet, only have $385k. I’m 54, and have been working since graduating college in 94. Didn’t start contributing to a 401k until my first corporate job. In my previous job, I have $347k So, in 29 year’s employment my 401ks have only contributed $732k. Am I doing something wrong? Thankfully, I received RSUs, participate in their ESPP program, and put aside a significant amount of each paycheck to savings and other investments (Index fund). I know a lot, their ONLY investment is their 401k, and makes me wonder how will they ever be able to retire.
What are you invested in and what are those ERs? That will probably help you more. Expense Ratios are likely your drag here. Find low cost ones. I’m talking less than 0.1%. For reference my biggest ER is 0.05%.
I’m invested in 5 funds. My Expense Ratios are between .014% to .044%. About 60% is in two Vanguard funds: Russell 1000 and Institutional S+P 500. In total, looks like I’m up about 9.5% YTD and 9.88% in the last year. (Is that factoring in my contributions?) Looks like it’s up about $100k in the past two years, but that’s counting the ~$72K I and my employer contributed.
Well, first of all you are doing far better than the vast majority of Americans. Second, most of us weren't able to contribute a huge amount to 401k (and mega back door wasn't nearly as common) until recently as salaries rose to astronomical levels, despite what the average Blind user expects. So I think you are doing just fine.
I am 48, started contributing around 30 (so 18 years), have about 800k in 401k, 450k in Roth IRA and 200k in wife's Roth IRA. Those are my retirement savings. Stock is separate. So yeah I think expense ratios may have been the issue. Also mega backdoor (but that doesnt impact 401k).
Is your previous job 401k still allocated correctly? It's possible that when you left it became a rollover IRA with the money not invested in anything so it didn't grow. It should have about doubled in the last 8 years. Your numbers for the last 8 years sound right since they haven't had much time to grow. It should double every 7-10 years.
I will send you a DM
Well these 3yrs suck so…
“Only have 385k in 8 years” could mean many things. What’s the principal, what’s the growth, what are you invested in, does your company have after tax 401k, did you Max it out, etc?
The 401k may be invested too conservatively. Given S&P historic returns, it should be higher.
I will admit that recently, I did more to less risky, more conservative funds. Mostly because I’m getting close to retirement. Prior, they seemed relatively aggressive. It’s one of these investment funds honestly I don’t pay much attention to. I still contribute—max it out and company match—but then it just sits there. My former employer’s 401k, I rolled over into an IRA our financial advisor is managing. I’ll also share I’m seriously trying to get the SO to green light is canning our advisor and moving funds into VTI or VTSAX.
What is your portafolio allocation in your 401k ?
Is all cash, thanks for asking!