NEW YORK (MainStreet) — Your morning coffee may get you through the work day, but it’s going to hurt you financially when it’s time to retire.
According to Steve Orr, president and owner of the Orr Financial Group, if you bought one specialty coffee each day for about 40 weeks out of the year, that $3.95 cup would cost about $27,650 over the typical 35-year career span.
“It’s the little things,” Orr says. “It’s the dollar here, two dollars there things that we pick up every day that start to add up.”
Based on similar career-spans, Orr came up with the following stats :
- One daily $3 morning muffin = approximately $21,000 in retirement funds
- One daily $3.99 energy drink = approximately $27,930 in retirement funds
- One daily $8 lunch = approximately $56,000 in retirement funds
Orr adds that the dollars that could be saved by kicking a caffeine habit or by brown-bagging lunch pale in comparison to what could be saved if the money was put toward an investment account instead.
“If you were to put the total of all these items into your 401(k) or Roth IRA or any other type of retirement investment vehicle every year for 35 years and you earned a minimum of 3% interest every year on that money, you’d have an extra $246,560 in your retirement account at the end of that 35 years,” Orr says.
Orr believes it’s important for Americans to recognize the savings and investment alternatives that can put them on track to a happy retirement, as pension funds are becoming more scarce and companies are continuing to scale back or eliminate their matching contributions to employees’ 401(k)s.
Many recent studies have indicated that a majority of workers are woefully underprepared for retirement, including this one from Wells Fargo that found middle-class Americans are about $300,000 short on their retirement nest egg.
“When you wean yourself off the little impulse buys and put those funds back into your retirement account, not only will you lose a few pounds and get off the caffeine, you’ll wind up a little more comfortable when you retire, as well,” Orr says.
Need more tips to boost your retirement savings? Find out how to get through your golden years without government help.
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