401K Math

[hughee99]

17. You did read the OP, right?

"In order to generate $60,000 per year in income then, you need $1,500,000 in a 401K. That's in today's dollars. How many of your friends and neighbors do you suppose have $1.5M in a retirement fund? Next, those who are 25 years old today, will need to generate approximately $200,000 per year in retirement income when they retire in 2053, to match what $60,000 buys today (assuming a 3% inflation factor for 40 years.) How much will they need in their 401K to generate that income? Using the 4% withdrawal factor, they'll need $5M. How much do they need to be saving each month to reach that $5M goal in 40 years? $3,300 per month, and that's assuming a 5% rate of return every year for the next 40 years. "

According to the "401k math" laid out in the OP, if you are 25, you'd have 40 years to retirement and need $5 million at retirement to guarantee $200k per year (for 25 years, or until the retiree reaches 90 years old). The math on this only works out if you assume NO earnings accumulation. Any earnings accumulation and you're taking out money well into your 90's and beyond. The OP did the math and no such factor is taken into account. Perhaps you should have said "Luckily the OP isn't providing financial services". This is leaving aside SS as well, as it was already mentioned.