The $41,519 lunch – if you save just a few extra dollars per week, you can significantly increase your retirement savings. For example, if you save just $10 a week, or two $5 lunches, it will boost your retirement savings by $41,519 over 25 years (at an 8% annual compounded rate of return).
Have you ever stopped to think how only a little money over time can make a huge difference in what you save for the future? Simply put: the sooner you start saving, the better, because the longer your money is working for you, the more potential earnings you will have. The more you save, the more your money will grow. Think hard about it: everyday items may cost only a few dollars, but when you put those same dollars together and invest them, they can mean significant savings.
Item |
Skip how often? |
Contribution |
Increases account balance by |
Movies |
Once/month/25 yrs |
$10 month/$120 year |
$9,574 |
Buying lunch |
Twice a wk/25 yrs |
$10 week/$520 year |
$41,519 |
New outfit |
Once/yr/25 yrs |
$200 year |
$15,791 |
Compact disc |
Once/month/25 yrs |
15 month/$180 year |
$14,360 |
Coffee and donut |
Once/wk/25 yrs |
$2 week/$104 year |
$8,304 |
Dining out |
Once/wk/25 yrs |
$25 week/$1,300 yr |
$103,797 |
Assumptions: Hypothetical examples based on contributions made at the beginning of the period to a tax-deferred retirement account earning an 8% annual rate of return compounded at the same rate as contributions over a 25-year period. Your own investment returns may earn more or less than these examples, and income taxes will be due when you withdraw from your account.
NOW is the time for action. A recent graph in Business Week showed the following percentages of Americans at each savings level as follows:
Percent of Americans |
Savings Level |
26% |
$0 |
35% |
Less than $25,000 |
11% |
$25,000 - $49,999 |
10% |
$50,000 – 99,999 |
18% |
More than $100,000 |
In other words, over 60% of Americans have saved less than $25,000. That is disheartening. Where are you now? Where do you want to be? Do you know what it takes to get there? That is the essence of financial planning. We can find out where you are now. We can find out where you want to go. We can put together a plan to get you there and help you achieve it. We help you make smart financial decisions. Call Rio Financial Advisors today. Thank you. |
