I think you should do some Monte Carlo simulations to see if the $10mm retirement portfolio value in 21 years, with $430k starting value, and ~$84k/year of contributions is realistic. I used Portfolio Visualizer to do a quick analysis and it looks like $10mm nominal is within realm of possibility at around 50th+ percentile, with a portfolio of just 80% US equity and 20% international equity (I don’t think you previously mentioned how much international you want).Thank you for your input.I would use the least expensive fund options in the 401k that fit your desired asset classes. I’d be using the S&P 500 and international index funds, but this is your choice. I wouldn’t bank on consistent overperformance of an actively managed fund over its benchmark. The one thing you can be sure of with investments is your cost. Try to minimize them as much as possible while keeping the desired risk profile.
I don’t see how you’re going to get to $10mm in 21 years with $430k starting portfolio and $30k/year contributions. Why do you want to get to $10mm? Most folks determine their retirement number by some multiple of annual expenses (typically a multiple that aligns with a 3-4% withdrawal rate, or even less if they’re more conservative or could have a longer retirement).
If you make $350k, save $30k, and spend $120k, where is the rest of your money going? Even if you’re paying $100k in taxes, that leaves $100k unaccounted for. That’s a lot of money, especially if you don’t know where it’s going.
I think you need to save a lot more money each year if you really want to get to $10mm in 21 years. You’re currently saving less than 10% of gross income which is not great at all for some at your income level.
The $10MM is a back of the envelope number I came up with. At a conservative withdrawal rate of 3%, that would be roughly $300K or 2.5x my current expenses. I figured this would be the most conservative number for me to maintain my lifestyle with inflation and other unknown factors.
I think I caused confusion with the annual contributions layout. I am saving closer to $66K, ($30K for 401k and IRA) and another $36K through employer after tax contributions that get converted to Roth. My taxes are roughly $140K per year and after expenses, I've been putting away the remainder into a HYSA account. This leaves my savings rate at around 40% of my after-tax income.
The plan is to invest $50K from the HYSA into a taxable brokerage account this year and fund with $10K-$20K annually after. Do you think the $10MM total portfolio is still unrealistic with the updated info?
Statistics: Posted by tashnewbie — Sat Mar 02, 2024 3:30 pm — Replies 15 — Views 1013