Ever since I started working, it’s been said that social security won’t be around when I hit retirement age. They started emphasizing to contribute to a 401K or other retirement account so that you’re not stuck with anything. And that’s what I did from an early start, 20+ years ago. I wrote about maximizing 401K and why I did it. I wrote about the pros and cons from my experience. You might be asking whether my decision has paid off or not. Here’s what 20+ years of contributing the max limits to retirement look like.

Below is a chart of the maximum contribution limits from 1998 to 2020 which is 22 years. If you contributed the maximum amount each year, just your contribution, you would have invested $349,500 of pre-tax money.

2020	$19,500.00
2019	$19,000.00
2018	$18,500.00
2017	$18,000.00
2016	$18,000.00
2015	$18,000.00
2014	$17,500.00
2013	$17,500.00
2012	$17,000.00
2011	$16,500.00
2010	$16,500.00
2009	$16,500.00
2008	$15,500.00
2007	$15,500.00
2006	$15,000.00
2005	$14,000.00
2004	$13,000.00
2003	$12,000.00
2002	$11,000.00
2001	$10,500.00
2000	$10,500.00
1999	$10,000.00
1998	$10,000.00
Total	$349,500.00

$349,500 is a good chunk for retirement but wait! Don’t forget that most employers contribute a percentage towards it and in my experience it’s between 2-5%. On top of that, your contribution plus your employer contributions are being invested in your 401K financial vendor so your money is growing. If the market is doing well, your 401K is probably doing well. And vice versa.

Let’s say you’re getting a 6% average return per year in your 401K + 4% employer contribution. What does your 401K look now? Now these numbers are estimates but just take a look at how much growth potential your 401K has when you factor in your contributions plus employer contributions and a positive growth rate.

Year	Max Limit	Employee Contribution	Employee + Employer  + 6% Return
2020	$19,500.00	$349,500.00	$699,937.97
2019	$19,000.00	$330,000.00	$640,842.99
2018	$18,500.00	$311,000.00	$585,591.88
2017	$18,000.00	$292,500.00	$533,967.06
2016	$18,000.00	$274,500.00	$485,783.26
2015	$18,000.00	$256,500.00	$440,326.85
2014	$17,500.00	$238,500.00	$397,423.44
2013	$17,500.00	$221,000.00	$357,467.40
2012	$17,000.00	$203,500.00	$319,753.02
2011	$16,500.00	$186,500.00	$284,672.28
2010	$16,500.00	$170,000.00	$252,096.11
2009	$16,500.00	$153,500.00	$221,363.88
2008	$15,500.00	$137,000.00	$192,331.21
2007	$15,500.00	$121,500.00	$165,979.63
2006	$15,000.00	$106,000.00	$141,099.65
2005	$14,000.00	$91,000.00	$118,106.84
2004	$13,000.00	$77,000.00	$97,413.25
2003	$12,000.00	$64,000.00	$78,888.72
2002	$11,000.00	$52,000.00	$62,410.49
2001	$10,500.00	$41,000.00	$47,882.73
2000	$10,500.00	$30,500.00	$34,696.16
1999	$10,000.00	$20,000.00	$22,236.00
1998	$10,000.00	$10,000.00	$11,000.00

Now, each year will be different. You’ll have years where you may have a negative return and years where returns are as high as 20%. But on average, if you maintain a positive average of return, your balance could be just as high, if not higher. I’m using figures that reflect maximum contributions. You may not want to contribute that much to your 401K but take a look at the potential you can have after 20+ years. Plus you have another 20+ years to reach retirement. Imagine what you could retire with.

My point is that if you are starting out in your career, don’t forget about investing in your retirement. The earlier you start contributing the earlier you can grow for your retirement. With the stories of retirees not having any savings or any retirement funds by the time they retire, is concerning. I don’t want to be in that situation and I hope you don’t either.

If you didn’t start early, it’s never too late to start. Start by maximizing your contributions and looking into catch up contributions if you’re eligible. Take advantage of any employer matching contribution and watch your portfolio grow with the market. Plus you contribution is pre-taxed. If you are interested in following my journey, email subscribe to get alerts of latest posts or follow me on Facebook.