Confused by the title? No, it wasn't a typo. Pizza, alcohol, restaurants, clubbing and a few other lifestyle related expenses can actually add up to a lot more than $600,000 when you are ready to retire at the age of 65. How, you might ask? Consistent savings and the power of compound interest is how!
Take a look at this reverse engineered retirement savings calculator tool that shows you exactly how it works!
Let's look at an example.
A person is 25 years old.
He or she spends about $50 a month at Starbucks, for that morning latte before work. Then, there is the occasional breakfast, maybe at iHop, adding up to about $25 a month. The local food court close to their place of work calls out to them, making them spend another about $60 a month on sandwiches, nachos and what not.
Of course, there is the date that you have to take out to a restaurant, at about $75 a month. Don't have a date? Maybe you have to spend $50 to cover charges at clubs, to meet that potential date.
Movie tickets might be affordable but the popcorn isn't exactly cheap now, is it? Let's add another $30 a month for the visit to the cinemas.
Pizza seems a must, as always. Maybe another $35 for a couple of Pepperoni pizzas delivered to your home.
Like a little red or white now and then? A couple of decent wine bottles will set you back about $30 a month, at least.
Let's also not forget that squirt or sport-top water bottle that you pick up once in a while. At about a $1 a pop, let's say you have a good water drinking habit and spend about $20 a month to keep yourself hydrated.
What do all these expenses add up to in a month? $375 is what. Do you think they are reasonable? Yes, no, maybe. Well, let's say you say they are reasonable. Even if you do, let's consider this. You dial back your spend on all the above items by 50%. You have $189 in monthly savings.
Now, let's say you start investing these savings into blue chip equities, something that can easily earn you 8% a year, like many blue chips have for almost a decade now!
What would you have at age 65, when you are ready to hang up your boots and relax, finally? How about $648,972. That's exactly what you will have!
The average American retires with just $129,000 at age 65, a paltry sum that will not cover healthcare, accommodation and all the special-need expenses needed in the golden years.
Cutting back a little now is going to allow you to have a great retirement. Always remember, you are going to want to live just as well at age 65 as you do now.
If you are willing to cut back on your lifestyle expenses and invest those savings, what do you think you can save at age 65? $100,000, $500,000 or maybe even more than $1 Million? It is perfectly doable.
Try for yourself by using this interactive retirement savings calculator tool.
Take a look at this reverse engineered retirement savings calculator tool that shows you exactly how it works!
Let's look at an example.
A person is 25 years old.
He or she spends about $50 a month at Starbucks, for that morning latte before work. Then, there is the occasional breakfast, maybe at iHop, adding up to about $25 a month. The local food court close to their place of work calls out to them, making them spend another about $60 a month on sandwiches, nachos and what not.
Of course, there is the date that you have to take out to a restaurant, at about $75 a month. Don't have a date? Maybe you have to spend $50 to cover charges at clubs, to meet that potential date.
Movie tickets might be affordable but the popcorn isn't exactly cheap now, is it? Let's add another $30 a month for the visit to the cinemas.
Pizza seems a must, as always. Maybe another $35 for a couple of Pepperoni pizzas delivered to your home.
Like a little red or white now and then? A couple of decent wine bottles will set you back about $30 a month, at least.
Let's also not forget that squirt or sport-top water bottle that you pick up once in a while. At about a $1 a pop, let's say you have a good water drinking habit and spend about $20 a month to keep yourself hydrated.
What do all these expenses add up to in a month? $375 is what. Do you think they are reasonable? Yes, no, maybe. Well, let's say you say they are reasonable. Even if you do, let's consider this. You dial back your spend on all the above items by 50%. You have $189 in monthly savings.
Now, let's say you start investing these savings into blue chip equities, something that can easily earn you 8% a year, like many blue chips have for almost a decade now!
What would you have at age 65, when you are ready to hang up your boots and relax, finally? How about $648,972. That's exactly what you will have!
The average American retires with just $129,000 at age 65, a paltry sum that will not cover healthcare, accommodation and all the special-need expenses needed in the golden years.
Cutting back a little now is going to allow you to have a great retirement. Always remember, you are going to want to live just as well at age 65 as you do now.
If you are willing to cut back on your lifestyle expenses and invest those savings, what do you think you can save at age 65? $100,000, $500,000 or maybe even more than $1 Million? It is perfectly doable.
Try for yourself by using this interactive retirement savings calculator tool.
