If you start maxing out your 401k at age 30, retire at 65, and get the average of 10% return you will have close to $3,000,000 at retirement. That's very easily achievable as a pharmacist, you just have to take that first step.
There are a couple of issues with this scenario:
First, a 10% average return over the next 35 years is optimistic. While nobody can precisely forecast the future, the current bull market will end someday.
Second, -and this is the more important point- the timing of the returns will play a huge role in how much money you'll end up with.
For ex., let's say you invest $100k over 3 years. While the average return is "5% per year, over the 3-yr period" in the scenarios below, things are definitely not the same when you look more closely:
Scenario 1: you get 5% every year, over 3 years. You end up with
$115.8K (I am rounding off).
Scenario 2: the market tanks -30% the first year, then -20% the second year, then recovers +65% the third year. You end up with
$92.4K
Scenario 3: the market goes down -10% the first 2 years, then goes up 35% in year 3. You end up with
$109.4K
So you end up with widely different outcomes.
The problem with most financial planners is that they use a
deterministic model: you get 5% (or 7%, or 10%) per year, over the next 40 years. Reality is
stochastic, more like a random walk. It's akin to plotting the course of a hurricane: the further out you go in time, the more uncertainty you have.
If you use financial planners, ask them if they have access to Monte-Carlo simulations. IMO, those do a better job of modeling the future because they give you a range of possible outcomes.
(Note: I have a MBA with a concentration in Finance).
