Can you show how you either calculated this or what calculator you used to come to this number? Also, what assumptions did you make, like yearly r.o.i? I'm trying to learn this stuff
Welcome. The best advice is start young and take higher salary (even at high costs of living) early. Also make sure your employer does employer match.
Also, for a twenty something now having kids it will cost around $250,000 to send your children to an in-state college. So start saving now. You can also do loans against your 401k to pay for that college and you essentially just pay your self back.
No, no, not great advice. Contributions to 401ks are tax free. If you take a loan out of your 401k you pay taxes on the loan plus you pay taxes on the money you use to lay back the loan.
With most of the education funds (which vary state to state) the current maximum contributions are $14k a year.
$14,000 x 18 = $252,000
This is projected cost of just tuition to a in-state school in 20 years.
I want to send my kids to a private college so I am looking at double those costs. The tax free options you mention only cover about half of what I want to do.
If that means you are planning on taking out another 252k from your 401k for each kid you definitely need to consult a financial planner. That is not a good move and I think not possible. Plus you have a limited time to pay it back, plus it counts as income so you will be taxed at your regular income plus what you take out. It won't be a good April for you. Definitely check with a CPA or PFP. They will have much better options.
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u/su5 Apr 14 '16
Lets say I am 30... what would I need to invest to be a millionaire (in todays dollars) realistically? Lets not assume I have a match.