Monday, March 27, 2017

The $25 A Week Master Plan To Retirement

My kids overheard a conversation i was having regarding saving for early retirement and were intrigued, not about retiring, but about saving what for them is an insane amount of money. Since their earning potential was limited to washing the neighbor’s car, or mowing a lawn, I tried to show them how easy it would be to start small.
A small goal is all that is needed, say $25 a week. I used the morning coffee their uncle buys every morning as an example.  Coffee should be brewed at home; Easy math, $5 a day is $25 a week. 
$25 a week is roughly $100 a month, $1,200 a year. May not seem like much, but I found an IRA calculator and plugged in the numbers. That money contributed from the ages of 19 to 65 could easily add up to more than $390,000.  Not a bad return on your investment that totaled $55,200 spread out over 25 years.
I also mentioned the lunch they buy at school every day.  They could brown bag it and save all that cash. They said that they saw my point but that my math was flawed as the ingredients had to be purchased. At least they saw my logic.
I had a captive audience. They wanted to know more. They learned about savings accounts, 401Ks and IRAs. Sure there are many other tools out there, but a did not want to overwhelm them. The way things are right now who knows what the age of retirement will be for them. Hopefully they didn’t ask just to amuse me.
Have you done anything to save tor retirement?  Remember, over time small saving add up.
I am not a financial advisor. I hold no fancy degree and as such this is not financial advice.  This is simply what I have done and recommend my children do when the time comes.