How many years does it take to maximize a 401 (k) to become a millionaire? | Personal finance

Scenario A, of the choices presented, is the fastest way to become a 401 (k) millionaire. The individual contributes a maximum of every single year, earns the full employer match, and reaches the seven-digit club of just over 19 years.

In Scenario B, another sensible person decides not to contribute the full amount to their 401 (k) plan, but still contributes $ 10,000 and earns the full employer match. With an average return of 8%, this person reaches $ 1 million in just under 25 years.

Finally, Scenario C depicts a person who fell into a less than ideal market environment and earned only 6% on their investments. It would take this person almost 22 years to become a 401 (k) millionaire.

Of the variables you have control over, the most important is to make sure you get as close to the maximum as possible when it comes to contributing to your employer’s 401 (k) plan. You should also make sure that you get the full employer match. In terms of market returns, you have no control, but you can get the most out of your long-term investments by choosing an asset allocation that suits you and agree with it.

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