In a fun read over at fivecentnickel.com, they talk about using the money you would normally spend on lunch each day to fund your IRA. The author says that if you saved $3.50 each workday and invested it at an 8% return, you would have close to $100,000 in 30 years!
This article over at Time Moneyland, says that the typical workday lunch costs between $7-13, so you’re savings could be a lot more than that! If you ate out five days a week, you’re looking at $2500 per year wasted on lunch! Only eat out three days? That’s still $1500!
Everyone’s looking to make cuts in their life to save money, so why not start brown-bagging it? And instead of blowing that money on useless things, use it to fund your retirement. This money would go a long way to reach your employer’s 401k match. If you’re already doing that, are you saving with an IRA plan as well? Since money is so tight nowadays, that answer is no more often than not.
If you skip the lunch and save $7 a day (which is $1750 a year) and invest that into a Roth IRA with a 6% return for the next 30 years, you would have close to $150,000…tax free! This does ignore inflation, but it goes both ways since the cost of lunch would rise as the value of the dollar decreases.
Just one final thought to add to this great article. Even if you don’t eat out for lunch, you are probably wasting money on things you don’t absolutely have to have. Eat out often? Hit a movie every week? Smoke a pack a day? Buy brand name (insert product here)? There are plenty of things you can do to be able to afford to retire when you want!
The IRA Financial Group is waiting to hear from you for any questions you have. Call us at 800.472.0646 and speak to a tax expert to help you better prepare for retirement.