I have noticed that many people have mutual funds in their 401K and IRAs. The gain with mutual funds is significantly low. Sometimes the gain is flat or loss if the investment stays for some years. What type of strategies the people who approach retirement follow to grow their $300,000 in the account to $1,000,000 in 5 years?

  • 4
    "The gain with mutual funds is significantly low." What is your basis for this?
    – D Stanley
    Jan 8 at 15:25
  • I think that will depend on the definition of "low". Jan 8 at 16:57

2 Answers 2


Growing 300k to 1M in 5 years is a 27% annualized return which would be extraordinary over 5 years. That level of growth in passive investments would take a significant amount of risk, which would mean it would take a good amount of luck (since there would be a symmetric chance of having high losses as well).

The safest way to grow 300k to 1M in 5 years with minimal risk is to increase your savings rate, so that you require a lower rate of return and can take less risk.


One way to help is to maximize the contributions into the IRA and 401(k).

Assuming over age 50 and married. Each can contribute $27,000 to their 401(k), and also they might be able to put as must at $7,000 each into an IRA. That would be $68,000 in contributions. If they also received $5,000 each in company match they could take it to a total of $78,000 a year. That would mean $390,000 in new money over the 5 years.

Some people when they get close to retirement age are able to significantly increase their retirement investments, because the kids have moved out of the house and college bills are behind them.

Under this scenario my back of the envelope calculation shows the required rate of growth would drop to closer to 11%. Much more doable.

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