Was curious to see how my 10 year returns were doing for my 401k. You know, just to keep up with the real estate crowd. Here's my simple math:
$143,457 Total Contributions
$441,387 Current Value
208% ROIC
21% CAGR
So, 401k investing over a 10 year period rocks, right? Maybe.
That $441,387 is before tax. I think I can get all of it converted between age 55 and 70 before RMD's in the 12% tax bracket. So that leaves:
$388,421 after 12% tax
171% ROIC
17% CAGR
Still not too shabby and certainly keeping up with the RE crowd nicely.
But that is not what's important. If I want to retire, I need income not savings. That $388,421 @ 4% withdrawal rate would generate:
$15,537 of annual income
I think the RE crowd can get that from one property with an initial investment of maybe $60,000. So less than half of what I have contributed to my 401k.
Still, I'll take a 17% annual after tax ROIC any day of the week and twice on Sundays.
$143,457 Total Contributions
$441,387 Current Value
208% ROIC
21% CAGR
So, 401k investing over a 10 year period rocks, right? Maybe.
That $441,387 is before tax. I think I can get all of it converted between age 55 and 70 before RMD's in the 12% tax bracket. So that leaves:
$388,421 after 12% tax
171% ROIC
17% CAGR
Still not too shabby and certainly keeping up with the RE crowd nicely.
But that is not what's important. If I want to retire, I need income not savings. That $388,421 @ 4% withdrawal rate would generate:
$15,537 of annual income
I think the RE crowd can get that from one property with an initial investment of maybe $60,000. So less than half of what I have contributed to my 401k.
Still, I'll take a 17% annual after tax ROIC any day of the week and twice on Sundays.
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