You Might Not Become the Millionaire You Hoped of Becoming
In principle, a 401(k) plan is a smooth and effortless path to becoming a millionaire. Given the tax advantages granted to your contributions as well as the fairly high contribution cap, workers who start contributing at an early age and do it regularly can easily reach the $1 million threshold through careful and wise investing. Or so they think.
In reality, things are rather different. As of 2019, the average 401(k) balance was $103,700; although substantial, there’s a big discrepancy between this amount and the $1 million that financial planners claim you’ll need to live a reasonably comfortable retirement.