A common practice I see today is people maxing out their 401k plan contributions. One example is an individual who made $70,000 saying that he was putting 26% of his pay away into his retirement plan. Given that the yearly 401k limit is currently about $19,000 per year, I assume he’s maxing out his plan. If he does this for another 40 years, investing it all in stock index mutual funds, he’ll have about $4.5 M at retirement in today’s dollars. Pretty sweet, but does he really need $4.5 M at retirement if it means sacrificing that much ...
