How Many Years of Maxing Out a 401(k) Does It Take to Become a Millionaire?
Maxing out your 401(k) is one of the best things to do to ensure a growing net worth, and ultimately, a secure retirement. There are many reasons for this: Tax-deferred growth, employer-matching contributions, and access to basic investments are a few. But how long does it take to reach an account balance of $1 million? The answer will be different for everyone, but we can break apart the numbers to find out some basic truths.
Here, we'll look at how long it takes to become a millionaire by simply contributing to (and investing in) your 401(k).
It's good to revisit the basics about 401(k)s before we get into the hard numbers. First, recall that 401(k)s are tax-deferred investment vehicles; in other words, you get a tax deduction in the current year for any amounts contributed to your 401(k) plan, and won't have to pay any tax on earnings or growth until you withdraw the money in retirement.
Source Fool.com
