Several people dream of retiring with $1 million or more in their account. And to be honest, that goal isn’t entirely unattainable — irrespective of the retirement plan you pick. However, if you have a 401(k) plan, you have a great chance to meet that goal, even if you don’t have another savings plan. What’s important is that you wisely manage that sum. 

The good part about the 401(k) is that the annual contribution limit it includes is generous, i.e., much higher than what is permitted in an IRA. As of now, if you are under 50 years of age, you can contribute up to $19,500 annually in a 401(k), and if you’re 50 and older, you are allowed up to $26,000. 

However, there are more ways to add money into your 401(k). Several employers that sponsor the 401(k) match employee contributions to varying degrees. If you’re able to fetch a generous match, thousands of dollars could be added to your account for free. And the good news is that the match by your employer won’t be counted along with the given contribution limits. 

For instance, if you manage to really max out your 401(k) at today’s levels over a period of 40 years with a savings window between ages 25 and 65, you will have $877,500 in savings without any growth. But 401(k)s don’t work like that. So, you need to aim to invest 401(k) as aggressively as you can in order to grow your contributions to a larger figure. 

If your 401(k) is stock-heavy, it won’t be difficult for you to get a 7% return on investment on an average annually. By this calculation, you can indeed retire a millionaire with just over 4 million in your account. 

However, the scenario for maxing out a 401(k) isn’t that simple. A majority of people don’t start saving for retirement in their mid-20s, and neither do they invest aggressively enough. So, if you aspire to retire a millionaire, don’t follow their example.