29 Responses

1. Pinyo

   November 9th, 2007 at 9:01 pm

   1

   I like to do what if scenarios too, but this is very neat. Thumb up for you!

2. bob smith

   November 9th, 2007 at 9:01 pm

   2

   I did something similar. I maxed out my retirement plan at work, and my IRA. I also saved outside of retirement plans. Our income (wife and I) never exceeded $70,000 in a year - usually less - and sometimes much less. In just 14 years:

   – we owned the house free and clear
   – had zero debt
   – bought a very good long-term care policy for both of us and paid it off in one lump sum - I don’t think they’ll do that anymore.
   –helped put two kids through college (both accumulated zero undergraduate debt).
   – had over a million dollars in assets (not even counting the house, cars, personal possessions, or long-term care paid off

   So I just quit my job at age 52… just a brief notice and left. Now life is like a dream come true.

   Another interesting tidbit: I added up every penny my wife and I have ever earned, even as teenagers (I used the Social Security printout). When I quit my job, we had more assets than the sum of everything we had ever earned in our lifetimes.

   This is almost like magic. It takes some work and knowledge, but it is doable by a lot more people than are actually doing it.

3. Debt Reduction

   November 9th, 2007 at 10:48 pm

   3

   It is true however not all of us can do what you did. With a little restraint and planning it is easy to become debt free and even begin to grow your assets.

4. Enough Wealth

   November 10th, 2007 at 3:54 am

   4

   Thanks for the inspiration - I’ve done a similar calculation for the situation in Australia under the new contribution rules. American readers may be interested to see how we compare:
   http://enoughwealth.com/2007/11/what-if-you-make-maximum-retirement.html

   Regards
   http://enoughwealth.com

5. tlange

   November 10th, 2007 at 11:08 am

   5

   What would the USA or other countries look like if a majority of people would pay off debt and live debt-free? I have always wondered about this because it seems like a lot of people are in debt (including myself). We are currently working on it and hope to out very soon, never to return to the lifestyle of debt.

6. Jeff Pershing

   November 10th, 2007 at 12:31 pm

   6

   Compound interst is my friend. I always tell people you are throwing away $1,000 a day every day they let go by that they haven’t started their 401k. I am a youth pastor and I always tell my students to open an account as sson as they get a job.

7. Livingalmostlarge

   November 10th, 2007 at 4:29 pm

   7

   So does it make sense to maximize all retirement options before paying off the mortgage? I am of the opinion yes, but many who follow DR aren’t. My train of thought is you can’t go back in time and contribute.

8. Market and Money Gloom And Doom @ The Roundup

   November 11th, 2007 at 11:38 am

   8

   [...] Credit Needed: If you need more convincing about maximizing your retirement contributions, here’s just the ticket! The charts make the [...]

9. Weekend Update: Christmas is Coming Edition ∞ Get Rich Slowly

   November 11th, 2007 at 1:49 pm

   9

   [...] an IRA when you’re not sure you can afford it. And NCN has some revealing charts that explore what if you make maximum contributions to your retirement plans. These sorts of things always remind me how important it is to start saving now rather than waiting [...]

10. Personal Finance Review - Save While You Can Edition » Money Smart Life

    November 11th, 2007 at 3:36 pm

    10

    [...] Credit Needed covers maximum retirement contributions and the Mighty Bargain Hunter offers tips on setting up an eBay store. The Simple Dollar asks [...]

11. » Roundup: $1000 bagels and $25000 chocolate sundaes on Blueprint for Financial Prosperity

    November 11th, 2007 at 4:56 pm

    11

    [...] NCN ponders what would happen (mathematically) if you maximized your retirement contributions. [...]

12. » Weekly Blog Roundup, One Week to Flight Edition on Consumerism Commentary: A Personal Finance Blog

    November 11th, 2007 at 9:26 pm

    12

    [...] a Business, Act Like One! Get Rich Slowly: What to do When Money and Ethics Clash No Credit Needed: What if You Make Maximum Retirement Contributions for 20, 30, 40 Years Free Money Finance: How to Get Rich on $20k a Year AllFinancialMatters: Why on Earth Should We [...]

13. » Weekly Roundup - Toy Recall Edition @ fivecentnickel.com

    November 11th, 2007 at 9:39 pm

    13

    [...] out together a table of how well you’d do if you maximized your retirement contributions over various time [...]

14. velvet jones

    November 11th, 2007 at 10:55 pm

    14

    I just got out of debt this year. I was still contributing 20% of my pre-tax income to my 401k while doing it, however I hadn’t contributed to my Roth IRA (actually, I stopped that years ago when I was laid off and haven’t contributed since). Now that I’m out of debt, I’ve built up a $1,000 emergency fund and by the end of the year I’ll have three months of expenses saved up if I lose my job. I’ll start contributing the max to my Roth again in 2008. However I don’t believe I can contribute the max ($15,500) a year to my 401k on my $45k salary. I thought I was doing well with my 20% ($9,000). Oh well. I’ll just have to do the best I can with what I’ve got and hope for the best.

15. Weekend Linkage - November 11, 2007 | The Sun’s Financial Diary | A Personal Finance Blog on Saving and Investing

    November 12th, 2007 at 9:13 am

    15

    [...] NCN at No Credit Needed had some numbers for maxing out your retirement savings in 20, 30 and 40 years. [...]

16. JLP’s Weekly Roundup (Week of November 5, 2007)—� AllFinancialMatters

    November 12th, 2007 at 10:08 am

    16

    [...] hypothesizes what would happen if a person maximized his IRA and 401(k) contributions. - I like illustrations like this. The 401(k) example overstates the growth because it assumes the [...]

17. Dariaclone

    November 12th, 2007 at 11:16 am

    17

    Thanks for the info. I’ve often thought that as long as we can max out our 401(k)s from now until retirement, we will be ok in retirement and these numbers support that. (Obviously, there are tons of variables at play: actual return, cost of living, inflation, etc., but it does give a comfort level.

18. Plan for your future and reduce taxes | WI Tax Prep

    November 14th, 2007 at 10:36 am

    18

    [...] If you are taking full advantage of your employers matching then you should next bump up your contributions until you are contributing the maximum allowed.  Need some motivation?  Check out this article. [...]

19. Jason

    November 20th, 2007 at 3:54 pm

    19

    you should find out how much those amounts will actually be worth after 40 years by including inflation.

20. hank

    November 21st, 2007 at 12:56 am

    20

    no kidding - how great is compound interest? Well, apparently not great enough to teach a kid when he is 12 to put a bit away each month. I recall my parents telling me to save just a few bucks a month from my paper route. Did I listen? No. Do any kids listen? No. I guess that’s the point of being a kid though, eh? Nicely done… I’m motivated! I always am!

21. Weekend Links: Finally Getting Productive Edition

    November 25th, 2007 at 2:29 pm

    21

    [...] Credit Needed does a great job of getting me ENERGIZED about retirement plans. I’d use the 6% numbers to offset the factors of inflation. It looks like $800,000 in 401K [...]

22. rstlne

    November 26th, 2007 at 6:22 pm

    22

    I had to wait a year after I started working to be eligible for the 401K at my place of work, but I signed up as soon as I could do so. I maxed out my 401K ($15,500 this year) but I could actually save more than that so the rest goes into taxable investment accounts.

23. $10 A Day Equals 3/4 Of A Million Dollars

    December 10th, 2007 at 10:22 am

    23

    [...] (If you want to get really “pumped” about saving money - checkout what happens if you max our your 401k and Roth IRA contributions.) [...]

24. Me vs. Debt

    December 10th, 2007 at 11:14 pm

    24

    Meet Debt Goals or Invest in Roth IRA?…

    Lately I’ve been giving a lot of thought to meeting my financial goals. Its to the point where I’m already planning my financial goals for 2009! Assuming that I am already debt free by 2009, my fina……

25. Questions And Answers About Debt Reduction - Should I Cash Out My 401(k) To Pay Off Debt

    March 14th, 2008 at 6:16 am

    25

    [...] Finally, if you cash out your 401(k), you lose years of ‘compounding power’.  To see how important ‘compounding’ is, check out this chart. [...]

26. How Much Does It Cost, Per Month, To Fully-Fund Various Retirement Accounts?

    March 17th, 2008 at 7:01 am

    26

    [...] What If You Make Maximum Retirement Contributions For 20, 30, 40 Years? (Roth IRA, Traditional IRA, … [...]

27. No Credit Needed Debt Reduction Guide

    May 2nd, 2008 at 5:03 pm

    27

    [...] What If You Make Maximum Retirement Contributions? [...]

28. CPA1298

    May 5th, 2008 at 10:05 am

    28

    at Jason -

    NCN didn’t increase the amount of the contributions by inflation, so I think the model is basically ‘inflation adjusted’.

29.   The Most Awesome Readers In The World Share Their Best Personal Finance Tips by No Credit Needed

    August 2nd, 2008 at 10:28 am

    29

    [...] Start saving for retirement when you are young.  Check out this chart that details the benefits of saving for retirement when you are young. [...]