"Still, steady contributions and smart investing can turn even a modest balance into a large nest egg over time. Compounding does most of the heavy lifting, which brings us to a recent Reddit post. A 29-year-old with $45,000 saved is asking if it is really possible to retire with $4 million. An online calculator told them that a continued savings rate of 10 to 12 percent, combined with strong long-term returns, could push their 401(k) toward that number."
"Four million dollars is a huge retirement nest egg today, but that buying power won't look the same in 36 years. That is something the 29-year-old poster needs to keep in mind when evaluating their calculator results. Inflation chips away at the value of money over time. At a steady 3 percent inflation rate, prices double about every 24 years. In practical terms, $4 million today would need to be closer to $8 million in the future to offer the same lifestyle."
Having $45,000 in a 401(k) at age 29 is common because many people have only worked a few years and face entry-level salaries, student loans, and living expenses. Consistent contributions, disciplined saving, and smart investing allow compounding to grow modest balances significantly over decades. A continued savings rate of about 10–12 percent combined with strong long-term returns could plausibly push a $45,000 balance toward several million by retirement, but calculators often assume steady contributions and returns that may not match real life. Inflation and the desired retirement lifestyle determine whether a nominal $4 million will deliver adequate purchasing power.
Read at 24/7 Wall St.
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