Sponsor Voice (17:52)

Before I discovered Shopify, selling online felt like a constant uphill battle. But with Shopify, everything changed. It's the platform trusted by millions of businesses, including Gymshark, to grow their sales and deliver a seamless customer experience. And here's why I love Shopify. It's home to the number one checkout on the planet and their secret sauce Shoppay, which boosts conversions by up to 50%. That means fewer abandoned carts and more sales. If you've never used Shop Pay, it's absolutely amazing. Whether your customers are shopping on your website, in store, or scrolling through their feed, Shopify makes selling simple. If you're ready to grow your business, this is the platform you need. Upgrade your business and get the same checkout Gymshark uses. Sign up for your $1 per month trial period at shopify.compfp all lowercase go to shopify.compfp to upgrade your selling today. That's shopify.compfp.

Andrew (18:51)

The best piece of money advice I've ever gotten Start small, start now, and let time do the heavy lifting that stuck with me and it's exactly why I love Acorns. Acorns is the financial wellness app that helps you invest for your future, save for tomorrow and spend smarter today. You can start automatically investing with just your spare change. No need to be a finance expert and Acorns puts your money into an expert built portfolio so you're investing wisely, not wildly. It helped me stay on track towards my goals like retirement and building wealth for my kids all in one easy to use app. I use Acorns and you should too. Sign up now and Acorns will boost your new account with a $5 bonus. Investment join over 14 million all time customers who have already saved and invested over $25 billion with Acorns. Head to acorns.comp or download the Acorns app to get started. Paid non client endorsement compensation provides incentive to positively promote Acorns. Tier 2 compensation provided investing involves risk. Acorns Advisors LLC and SEC's registered investment advisor. View important disclosures@acorns.com Pfp Here's a stat that really hits home Nearly half of American adults say they'd face a financial hardship within six months if they lost their main source of income. And if that sounds familiar, you're not.

Sponsor Voice (19:58)

Alone and you've got options.

Andrew (20:00)

That's where policy genius comes in. In it helps you get life insurance quickly and easily so your family is.

Sponsor Voice (20:06)

Protected if something ever happens to you.

Andrew (20:08)

And you can compare quotes from top insurance companies in just a few minutes. And you don't have to figure it out alone. PolicyGenius has licensed agents who guide you.

Sponsor Voice (20:16)

Every step of the way.

Andrew (20:18)

And with Policygenius, you can find life insurance policies starting at just $276 a.

Sponsor Voice (20:23)

Year for $1 million in coverage.

Andrew (20:25)

It's an easy way to protect the people you love and feel good about. The future. Secure your family's future with Policygenius. Head to Policygenius.com to compare free life insurance quotes from the top insurance companies and see how much you can save. That's policygenius.com.

Chime Representative (20:43)

This episode is brought to you by Amazon Business. We could all use more time. Amazon Business offers smart business buying solutions so you can spend more time growing your business and less time doing the admin. I can see why they call it smart. Learn more@amazonbusiness.com all right, let's look at.

Andrew (21:01)

These 401k sprints by age. We're going to start off with the 20. So if you are in your 20s and you're listening right now, I want you to seriously consider this because you have so much time for your money to compound. You have no idea how valuable each of these dollars are. We have something called the wealth Builders matrix. If you go to MasterMoney Co Resources and what that shows you is every single dollar you invest based on how old you are, what are those dollars going to be worth by the age of 65? It's make you rethink going out for drinks with friend and getting that $20 cocktail. Because if you're at the age of 25, every single dollar that you spend can be worth 50, 60 bucks depending on where you invest those dollars. And so making sure you just have the understanding of opportunity cost and the trade offs here can be really, really important. Now let's dive into this. I'm going to give you the assumptions that we have in this episode and you can run these simulations based on how you want to do this too. So we did the annual return for all these fees at 8% rate of return. I tried to keep a balanced rate of return as we went through this. The annual contribution for 2025 is 23, $500. That is how much we are putting in for these sprints. The starting balance is $0. So this person, when we go through these scenarios, they have no dollars invested yet. So if you already have some money invested, you're going to be ahead of the curve compared to some of these examples. Also, the employer match is excluded in these examples. So if you do get an employer match that is excluded, which is also icing on top, there's the steak and the sizzle. And what we're talking through today is we're talking to the steak. All these extra things added on top are the sizzle for you that are going to help you improve your situation as time goes on. Also, the contributions will stop after the sprint Period. I want you to note that. So if it's a five year sprint, after five years you stop contributing based on these scenarios to make this as accurate as possible. And then when we go through this, you can think of this as in your Roth or you can think of this through your traditional. So first we're going to do a five year sprint starting at age 25. So age 25 to age 30, where you do a five year sprint and your total contributions are going to be $23,500 per year. That's over the course of five years. So you're contributing $117,500. So at the age of 65, if you did this just a five year sprint, didn't add any more money, just remember all the assumptions, your balance would be 2 million 38, $8,000 by the time you retire. That means your growth is going to be $1.9 million worth of growth over that time frame. So if you look at the 4% rule and you withdrew 4%, which is going to be something we're going to be challenging in future episodes here. But when we look at the 4% rule, that means you could withdraw $81,535 per year in retirement if you wanted to. This doesn't count Social Security or anything else. That you could have $81,535 per year just for five years of buckling down in your 20s. That is absolutely incredible. That is how powerful compound interest can be for you. By putting $117,000 in this account. So you get to your first 100k. This is why I tell you as early as possible, get to your first 100k, because this is going to change your financial life if you can do it early and often. Now let's look at a seven year sprint where you go from age 25 to age 31. Okay? So your total contributions during that time frame is going to be 164, $4,500. You're adding two extra years here. Your final balance at 65 is $2,766,000. So you do this for two years longer, and guess what? You have $766,000 more just by buckling down for two more years. And your contributions are going to be about an extra 50 grand right around there. Roughly now your growth is $2,601. So if you had this in a Roth 401K, you'd have $2.6 million that you could have grown completely tax free. Hugely powerful. Okay? And with the 4% rule, it's $110,654 is what you could spend every single year. Not counting Social Security, not counting pensions, not counting any other income you have, if you have rental income or any of that other stuff, that is how much you'd be able to withdraw with 4%. Maybe you want to go 5%. That is coming up on another episode 10 Year Sprint. So if you're in your 20s, you want to do a 10 year sprint or age 25 to 35. Let's talk about it. Total contributions, $23,500. Okay. And so you have contributed in total $235,000. Now, the cool thing is, most likely during that 10 years, the IRS is going to increase those contribution limits because they start to increase those limits when inflation happens and a lot of other different factors. And so that is something where you actually will probably even have more in there as time goes on. Your final balance at age 65 would be $3.988 million, over $1.2 million more than the seven year spread because you got started from age 25 to 35. So let's just say, for example, that you decide, I'm going to do this. I'm 25 now. I'm going to do everything in my power to make sure I can earn $23,500 extra in order to put in these accounts for 10 years. Because I want to make sure that I have almost $4 million in this account by the time I retire. Really, really powerful stuff. Why is this powerful? Because if you get this started early, this is not contributing another dollar later on. You could coast the rest of the way if you want to. This is why coast fire and that movement is so powerful. But this is going to give you more flexibility. Now, the growth that is $3,753,000. So again, in a Roth 401K, that would be the growth completely tax free. Really cool stuff. And then with the 4% rule, you can withdraw $159,555. Now let's go one more in the 20s, which is the two on two off strategy. Okay, so two on two off, meaning you're contributing for two years, you skip two and you repeat five times for 10 years. Total contributions are over 20 years. Okay, so you're going to do that this 10 years of contributing money to your Roth 401k and 10 years not contributing money. So that means your total contributions are going to be $235,000. And your final balance, because you're 2 on, 2 off is $2.931 million. So look at the difference there. A 10 year sprint where you don't do 2 on 2 off, you're going to be contributing the same amount of money, $235,000 into this account. But if you did the 10 year sprint earlier, you would have $3.988 million. But if you did two on two off, you would only have $2.9 million, which is still a great outcome. But it's a million dollar difference if you did the sprint early on and got your money invested early. And often very important to note because getting dollars invested early is just one of the most powerful things. This is why we talk about this. Time is your greatest ally when it comes to investing. Now, even if you don't have a lot of time, we're going to talk about that in a second here. If you're in your 40s, 20s, if you're in your 50s, getting those investment accounts maxed out is still really powerful. And we're going to show you here next. So let's jump into the 30s next. All right, so if you're in your 30s, then we have something that we are looking at here for this scenario. We're going to assume the same exact stuff. Okay? So we're going to assume 8% compounded annually in your 30s. We're going to assume the annual contributions are $23,500. Now, we're also going to look at the median investable assets for someone age 30 from the federal Reserve data. And we're going to look at this and say, okay, well the median investable assets for someone in their mid-30s is $37,000 according to the Federal Reserves. So we're going to assume you have $37,000 to make this realistic employer match in your 30s is going to be excluded and contributions stop after your sprint period again. So same exact thing as last time, except we're going to assume that you have a starting balance somewhat in your 401k. So a lot of you out there who are in your 30s, you started investing. If you haven't started investing yet, that's completely okay. Okay, we'll get started now. Now for a five year sprint for someone. Again, we know how much we're contributing, $117,500. If you started between age 30 to 35, your final balance would be $1,786,000. So let's think about this for a second. Okay, so this person started five years later than the person who started at age 25 and starting five years later actually is going to cost them about $300,000, okay? Which is a big, big difference in that growth because at least they still got that sprint early and often. But thousand dollars invested. And so because they had a little bit invested, this grew. Still a $300,000 difference. It'd be a much larger difference if you had a zero dollar balance. Now the seven year sprint is going to be something where we're going to contribute $164,500 in your 30s, okay? And your final balance is going to be $2.281 million. Meaning with the 4% rule, you can withdraw $91,263,000. So if you're someone in your 30s and you're saying to yourself, okay, okay, I'm getting started at age 30, I feel like I'm behind. But you're not really. When you're in your 30s, you have so much time left. So many people in their 30s come to me and say, I didn't start yet. What do I do? And they start to panic. You are not behind. You are going to be okay. And you have so much time for your money to compound that you should not worry. It is never too late to get started investing. I don't care if you're 40s, I don't care if you're in your 50s. You can still write the ship. And so that's what this episode is trying to show you, is you can write the ship ship. You just gotta buckle down a little bit. And that's okay if you have to buckle down a little bit. Sometimes we have to make sacrifices. But discipline, when it comes to your finances, the way I define discipline is that you are putting your future self ahead of your current self. And so if you can do that just for a couple of years, it can make a massive difference. Now, when you're in your 30s, I know you're in the messy middle. You maybe are getting married, you maybe are having kids, maybe you have multiple kids in daycare. And it gets harder and harder as time goes, goes on. That's okay. If we can find some years where we can hit some sprints, it's going to massively change your retirement plan over the course of the long run. Now, let's say you took your entire 30s and you decided, I'm going to sprint my entire 30s from age 30 all the way down to 3,940, okay? So your total contributions there would be $235,000 and your final balance at age 65 would be $3 million, meaning you can withdraw 122,291 $1,000. And the growth of your money is still $2.8 million. So your money made you $2.8 million without you having to go in and work every single day. Really powerful stuff. Your money can work way harder than you ever can. And so I want you to remember that and get those dollars working. If you did that over the course of 20 years, you have $2.32 million and you'd be able to withdraw $92,000. So, folks in your 30s, I want you to look at some of these takeaways here, okay? Even with just five years of intense saving in your 30s, you can still hit nearly $1.8 million. That's number one takeaway. I want you to think about number two. A 10 year sprint pushes you to $3 million despite starting with only $37,000. Really powerful stuff, because for 10 years, you buckle down, you have $37,000 in that account. You buckle down, boom, get to that point in time where you're making big progress and all of a sudden it changes your life. Two on and two off still net you $2.3 million. Proving that flexibility doesn't kill your retirement plan if you want to have a little more flexibility. But one thing to note is the later you start, the more you need to contribute in order to hit the same retirement goal for someone in their 20s when they started earlier than you, they don't have to work as hard as you do in your 30s. But that's okay because in your 30s you're likely going to be earning more money. You're going to have the ability to get these dollars working and investing. Next, we're going to talk about the 40s. All right, in your 40s, here are some of the assumptions that we are going to look at.8% return. Again, annual contribution is going to be maxing out at 23,500 dol. The starting balance is going to be what the Federal Reserve data shows is the median investable assets for people age 40 and above, which is $58,000 is what they're going to be starting with in your account. And then the employer match is excluded and contribution stop after this Sprint period, meaning you're not going to contribute anything else. So just remember this as we go through all these scenarios, if you continue to contribute, these numbers are going to be much higher. But these are for these Sprint periods and these shorter gaps that show you now in your 40s, you got a lot of things you got to deal with. You got kids who are getting older, maybe you got to do a lot of youth sports, your kids are going to college, you're having a lot of life changes, you have aging parents you have to take care of. And so there's a lot of things that you are dealing with during this decade. But that is okay because if you can find these sprint periods, if you got started late, it's okay because you're still going to make a tremendous amount of wealth. Watch this. So if you started from age 40 to 45 and you put $23,500 per year, that's $117,000. Your final balance at age 65, this is the first one coming in under a million is $951,567. So with the 4% rule, you can withdraw $38,062. So if you have Social Security, you have some other income coming in, that's a great starting point, is that you at least buckle down for five years and boom, you were able to produce a million dollars in retirement that you can utilize for almost $40,000 per year. Now this is at an 8% rate of return, the market returns 10%. These numbers are going to be drastically higher if their returns last, they're going to be lower. But just making sure that we know. Note that, hey, the S P500 over the course of the last 30 years has returned close to 10 to investors. But we always want to be conservative when we are planning for retirement. Now, seven year sprint from age 40 to 46, your total contributions would be164,500. And the total amount of money that you would have, your final balance would be $1,184,000, meaning you could withdraw 47, $394 if you did a seven year sprint. That, my friends, is a month a much better number I think than a five year sprint. So if you're in your 40s and you want to have a better retirement, I would sprint longer if you could, because since you're starting late, you just got to work a little harder and you got to contribute more money for longer periods of time. And honestly, if you're going to do this, I would also continue to contribute after this. But the sprint is just to get you started to get that bulk going. Now for a 10 year sprint, you'd contribute again $235,000. And your final balance at age 65 would be 1.5 million, meaning you could withdraw $62,183 per year with the 4% rule. And the growth of your money is going to be $1.3 million. So still a tremendous amount of money for starting in your 40s. And because of this, it can be very, very powerful. Now think about this. You're going to get to age 50 and all of a sudden, if you decide you want to continue to sprint, you have catch up contributions in your corner, meaning you can contribute even more money in these accounts than you could in your 40s. And so that's going to allow you to easily even pick up the pace. If you wanted to get to a 3, 5, $7 million retirement, there are extra things that you can do. And then two on and two off. If you did that, your final balance would be $1,313,000 and the growth would be about a million bucks. And your withdrawal would be $52,522 a year that you could withdraw in retirement as your income. So some key takeaways for your 40s, a five year sprint can still get you to 1 million bucks. That is really, really cool and a really powerful lesson for a lot of people. It is never too late to get started. A 10 year sprint can get you close to 1.5 million, a huge chunk of retirement funding, even with a shorter compounding Runway. So even though your compounding Runway is shorter, you can still get to 1.5 million. With a 10 year sprint, two on and two off still builds $1.3 million. So let's say you realize, oh, I need to get started on retirement. Well, over the course of the next 20 years, two on, two off will still get you to 1.3 million and the time is shorter. So the contributions are going to matter more in your 40s than for somebody in their 20s. It's going to matter a lot more for you now. And so getting more in is really, really important. And buckling down, down. So next we're going to jump into the 50s. So in your 50s, a lot of things are going to happen in life. A lot of life changes are going to happen. A lot of shifts will happen. You're going to really start to think about retirement. And so you want to make sure that you are taking advantage of these catch up contributions. So in this scenario, we ran it at an 8% rate of return. Again, your annual contribution is going to go up. We want to give you that catch up contribution to $31,000, which is the catch up contribution for 2025 is 7,000 and so the starting balance, we looked at the Federal Reserve's median balance for people in their 50s, which is $95,000. And so that's what your starting balance is going to be in these calculations. And then obviously contributions stop after the sprint period. And employer match is excluded in this as well. So for a five year sprint, for someone who sprints for five years from age 50 to 55, your total contributions are going to be $155,000. And your final balance at age 65 would be $492,201. And the growth of your money would be $242,000 and you could withdraw $19,688. So I would highly recommend for those who start in their 50s, if you're starting late, do these sprints for longer. Do them as long as you possibly can so you can get to the point in time where you have a tremendous retirement. Now, if you did it for seven years, your final balance would be $603,000 and the growth of your money would be $386,000. And the 4% withdrawal rule, you could withdraw $24,161 in that scenario. Now with a 10 year sprint, you would have $771,000 and you could withdraw $30,000 per year if you did it from age 50 to 60. And so this is one where if you're starting late, I would highly recommend that you do that. Now some of you may have more contributed on that account already. It's going to make a big difference if you do, because this is start with $58,000. If you have 100 grand or maybe a couple hundred grand inside of your 401k already, then this is going to make a big, big difference to what these numbers actually are. And then two on and two off. So compounding stops at 65 so that all the cycles will complete. But two on, two off, off would have a final balance of $677,000. And the 4% rule would be $27,100 is what you withdraw on that money. So some key takeaways is even with five years of maxing out, you can almost have $500,000 added to your nest egg for retirement. That can make a big difference for a lot of people out there. A 10 year sprint gets you close to $800,000. Huge difference for a lot of people out there. And even the two on and two off gets you to $680,000 during this scenario, proof that intensity and time still works in your favor, even if you don time as you would like. And so this is where I want most people to realize it is never too late to get started. If you're listening to this and your parents haven't caught up, for example, then send this to your parents so they understand that they could still get the ball rolling. Now we're also going to do scenarios for the 60s because people need to note that this is going to be something that you could do. So let's look at the 60s. We're going to do the same rate of return, 8%. The annual contribution is going to be the super catch up contribution. So $34,750 is what you can contribute. And the starting balance, the medium investable assets for people in their 60s is $145,000. Man, that's tough to hear because it's not enough to retire on. And so we're trying to change that right now for all of you and making sure that you get a higher number there. Employer match is excluded on this one too. And the contributions stop after the sprint. So a five year sprint from age 60 to 65, meaning that what would happen here? So your total contributions, because you could do 34,750 would be 430,001 year of $31,000, meaning it's not. Or 60 is when you can start to have that super catch up contribution. So we're looking at $170,000 invested. The final balance at age 65, we $430,410. Wow. I mean I think that is incredible. And that is something where you can still withdraw $17,216. So with a seven year sprint, the final balance would be $505,000 and you could have $20,000 per year in additional income. Income in a 10 year sprint would be $586,000 and you could withdraw $23,457 per year plus on the two year two off, which I wouldn't recommend in your 60s, this would be from age 60 to 80. And so really for most people this isn't going to work for them, but we did the scenario anyway. Your 4% withdrawal rule would be $19,200 per year is what you could have. And your final balance would be $480,000. So there's no reason, if you're in your 60s and getting started, there's no reason to do two on two off. You need to buckle down down and get the ball rolling. So some key takeaways for the 60s, even with just five years to save, you can still add nearly $430,000, translating to $17,000 per year in retirement. A 10 year sprint gets you close to $600,000 or about $23,000 a year in income. And the two on, two off still can get you $20,000 per year, but you got to do it till you're 80, which is tough. So the super catch up contributions Under Secure Act 2.0 are incredibly powerful for people in their 60s. So some final takeaways from this episode that I want everybody to understand as we start to wrap this up is that your 20s and 30s, compounding does the heavy lifting. 40s and 50s, your contributions are going to do a lot of the heavy lifting. And in your 60s, catch ups and time to income do a lot of the heavy lifting. And so for most of you out there, the earlier you can get started, no matter how old you are, starting today is one of the most powerful things. Thanks. Now if you're planning on doing a 401k sprint, I want to hear from you. I want to hear what you're doing. Also, if you want to get coached live by me, Master Money Academy is the place to be. We have the Wealth Builders journey in there that can transform your finances through the Wealth Builders journey. So make sure you look down below. We'll link up Master Money Academy, that is our community of wealth builders who are people who are trying to get their finances right. It is a great spot to be if you're doing a sprint, if you want to stay motivated for a sprint, because we do three things there. We coach you up through your finances. Number two, we help you find a community of other people who are doing this as well, who are trying to become financially independent or trying to become folks who are financially free or just want to have the option to leave their job if they want to. In addition, we're talking through all kinds of stuff like how to increase your income, how to save more money. There's so many good conversations in Master Money Academy. And then number three, we're there to motivate you. We're there to motivate you every single week. Week. So that you can stay the course, you can stay disciplined, and you can reward your future self by making better financial decisions. So would highly encourage every single one of you to check out Master Money Academy down below. It is a place where we are spending lots of time there. I am in there all the time chatting with people and so it's really, really powerful. Listen, thank you guys so much for being here on this episode. I truly appreciate each and every single one of you. We will see you on the next episode.

Sponsor Voice (42:37)

And Doug, here we have the Limu.

Andrew (42:39)

Emu in its natural habitat, helping people customize their car insurance and save hundreds with Liberty Mutual. Fascinating. It's accompanied by his natural ally, Doug.

Chime Representative (42:52)

Uh, limu is that guy with the binoculars watching us?

Andrew (42:55)

Cut the camera. They see us. Only pay for what you need@libertymutual.com Liberty. Liberty. Liberty. Liberty Savings Ferry Unwritten by Liberty Mutual Insurance Company Affiliates excludes Massachusetts.