[snakeyjake]

A McDonald’s worker who starts today aged 18 who makes $15/hr and joins the McDonald’s 401k plan and contributes 4% of their income to it and works at McDonald’s for 50 years never receiving a raise should expect to have very close to $1 million by the age of 68.

And that’s just 4%. McDonald’s has a 6% match.

[peteradio]

1M is the target today. What does that have to do with 50 years from now?

[snakeyjake]

That was just a silly little example of how if someone saves $24 per week over the course of a lifetime it can expand into great sums of money through the miracle of matching and compound interest.

And that was at 7% returns. Over the last 50 years the market has averaged 11% so if half a century ago (let's pretend 401ks are that old they're only 46 years old) an 18-year-old entry level worker emptied trash cans at an amusement park that had a 401k with employer match for 50 years they would have a vast sum of money today.

There are some people who cannot afford to save 4% of their income.

There are so few people who can genuinely not afford to save 4% of their (pre-tax) income that they are irrelevant to discussions about retirement saving.

[foogazi]

I’m not if they don’t take out any funds out of the 401k for health, housing, education

because there’s not a lot left over on $15/hour

[DecentRecruiter]

In 50 years, $1 million will be worth around $225,000 (assuming 3% inflation).