We have a millennial born in 1987. They graduated university with a 4-year degree summer of 2010, so 2011 is their first full-year real-world job at the age of 24. That gives them 15 full years in the workforce so far.
They did what their dad told them to do when they started their job, maxed out their 401k and put it into the S&P 500.
| Year | 401k Contrib. | S&P 500 Return | Gain/Loss | Portfolio Value |
|---|---|---|---|---|
| 2011 | $16,500 | 2.11% | $348 | $16,848 |
| 2012 | $17,000 | 16.00% | $5,415 | $39,263 |
| 2013 | $17,500 | 32.39% | $18,386 | $75,150 |
| 2014 | $17,500 | 13.69% | $12,683 | $105,334 |
| 2015 | $18,000 | 1.38% | $1,702 | $125,036 |
| 2016 | $18,000 | 11.96% | $17,107 | $160,143 |
| 2017 | $18,000 | 21.83% | $38,888 | $217,032 |
| 2018 | $18,500 | -4.38% | -$10,316 | $225,216 |
| 2019 | $19,000 | 31.49% | $76,893 | $321,109 |
| 2020 | $19,500 | 18.40% | $62,672 | $403,281 |
| 2021 | $19,500 | 28.71% | $121,380 | $544,162 |
| 2022 | $20,500 | -18.11% | -$102,260 | $462,402 |
| 2023 | $22,500 | 26.29% | $127,430 | $612,332 |
| 2024 | $23,000 | 25.02% | $158,960 | $794,292 |
| 2025 | $23,500 | 17.88% | $146,211 | $964,004 |
Their exact salary doesn’t matter (because this is the legal maximum to contribute) but on an $80,000 salary, that would be saving around 25% of their pre-tax income per year. That’s a lot but certainly isn’t life-deprivingly insane if you’re willing to cook and drive the Honda Fit. Financial independence minded people are often more aggressive than that.
Now it’s 2026, they’re 39 years old. They married someone just as responsible, so as a couple they have $1.928 million.
Assuming 25% of their income goes to taxes, they’re spending max $80,000/year. They’re close to napkin-math retirement with the 4% rule at 39! Just with a 401k! That’s remarkable.
Same scenario, but we’re going to max out the three most common tax-advantaged accounts: 401k, Roth IRA, and HSA.
We’re also going to put $1,000/mo into a taxable brokerage account as a bridge to help cover the gap between early retirement and easy access to the 401k/IRA.
| Year | 401k | Roth IRA | HSA | Brokerage | S&P 500 | Gain/Loss | Portfolio Value |
|---|---|---|---|---|---|---|---|
| 2011 | $16,500 | $5,000 | $3,050 | $12,000 | 2.11% | $771 | $37,321 |
| 2012 | $17,000 | $5,000 | $3,100 | $12,000 | 16.00% | $11,907 | $86,328 |
| 2013 | $17,500 | $5,500 | $3,250 | $12,000 | 32.39% | $40,351 | $164,929 |
| 2014 | $17,500 | $5,500 | $3,300 | $12,000 | 13.69% | $27,822 | $231,051 |
| 2015 | $18,000 | $5,500 | $3,350 | $12,000 | 1.38% | $3,724 | $273,626 |
| 2016 | $18,000 | $5,500 | $3,350 | $12,000 | 11.96% | $37,372 | $349,848 |
| 2017 | $18,000 | $5,500 | $3,400 | $12,000 | 21.83% | $84,863 | $473,612 |
| 2018 | $18,500 | $5,500 | $3,450 | $12,000 | -4.38% | -$22,472 | $490,590 |
| 2019 | $19,000 | $6,000 | $3,500 | $12,000 | 31.49% | $167,240 | $698,330 |
| 2020 | $19,500 | $6,000 | $3,550 | $12,000 | 18.40% | $136,046 | $875,426 |
| 2021 | $19,500 | $6,000 | $3,600 | $12,000 | 28.71% | $263,134 | $1,179,661 |
| 2022 | $20,500 | $6,000 | $3,650 | $12,000 | -18.11% | -$221,270 | $1,000,541 |
| 2023 | $22,500 | $6,500 | $3,850 | $12,000 | 26.29% | $274,833 | $1,320,224 |
| 2024 | $23,000 | $7,000 | $4,150 | $12,000 | 25.02% | $341,866 | $1,708,241 |
| 2025 | $23,500 | $7,000 | $4,300 | $12,000 | 17.88% | $313,801 | $2,068,843 |
Over the past 15 years, now they’re individually saving an average of $41,675 per year. This requires high salary or intentionally frugal lifestyle, but these numbers aren’t impossible. You’re not going to accidentally hit this like you might’ve with the 401k-only though.
And after just 15 years, this theoretical married couple now has over $4 million at age 39! Each of them has:
This is certainly enough money to easily plan for any kind of retirement, potentially even retiring at 40.
Do you wish you maxed out your retirement accounts at 24 now? I sure do.
All this math is due to the historic bull run we’ve had since 2012. I’m certainly not looking at these charts and saying “Just max your 401k now at 24 and you’ll be financially independent at 40!”.
I’m looking back at an incredibly lucky period in market history and saying “If you were smart enough to max your retirement accounts in the past, this is where you’d be at”. For this kind of thing to be possible going forward, we need continued infinite growth in a finite universe. This bull run will end.
The point is you didn’t have to buy real estate at the bottom, get lucky with Bitcoin, or flip Pokemon cards. Mid to high earning gen Xers and millennials had this opportunity by doing the dumbest, most basic, tax code-incentivized thing.
I wanted to run these numbers with the real historical data for my generation (knowing that recent returns have been insane). These are what the numbers would be if the market instead returned a theoretical constant percentage from 2011-2025:
| Annual Gain | 401k only | 4 accounts |
|---|---|---|
| 4% | $393,613 | $835,339 |
| 5% | $426,502 | $906,336 |
| 6% | $462,577 | $984,268 |
| 7% | $502,156 | $1,069,828 |
| 8% | $545,588 | $1,163,780 |
| 9% | $593,256 | $1,266,959 |
| 10% | $645,580 | $1,380,282 |
| 11% | $703,018 | $1,504,754 |
| 12% | $766,073 | $1,641,475 |
Not quite the magic of the last 15 years, but even at a ‘conservative’ 7% it’s around double what you put into the account. Not a bad deal.