401k Return on invested capital

[corn18]

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.

[disneysteve]

Great numbers, and I'm certainly an equity investor myself.

That said, it really isn't a competition between stocks and real estate. They are very different investments with different risks and different potential rewards. And it's not an either/or situation. You can do both and probably should if you're so inclined. Personally, I'm just not cut out to be a landlord so I stick with non-real estate investments. It isn't because I don't think real estate is a good investment. I just don't think it's the right thing for me.

[Atretes1]

Not sure how to figure those numbers but I have contributed $68,900.00 to my 457(b) since 2004 and it is now worth 105,121.00. I also have 4 rental properties. I am playing both sides of it.