Americans are not doing a good job of saving for retirement. If you are eating out several times a week, subscribe to delivered meals, buy your coffee out and keep giving in to retail therapy, you may be losing from $100k to $500k in retirement savings!
A recent GOBankingrates.com found that Forty Two percent of Americans will retire broke because of non-essentials regularly purchased. CNBC found the”Latte factor” is costing $5,339 a year on average that could be saved for retirement. Some of the people surveyed claimed to live paycheck to paycheck, but the survey also found many who are buying coffee in a shop or restaurant each morning, along with breakfast, then buying lunch out and picking up dinner or paying for pricey meal kits to be delivered. This is happening several times a week. Folks are buying new clothes frequently and keeping up with the newest electronic innovations. All those expenses add up to a lean retirement.
Forty two percent (42%) of those surveyed has saved less than $10,000. That is not even enough to cover one year of retirement expenses! And that number will get worse as inflation eats away at retirees’ buying power.
Living more simply does not mean always staying home, but it might mean rethinking how to keep your standard of living sustained by just planning ahead. What entertains you? Are you willing to check out free options in your area? Make ahead meals and freeze ‘em for self-prepared convenience meals during the week.
Cutting these expenses can add $500,000 to your retirement savings! The following list is in order of amount spent, starting with the highest.
- Eating out and food delivery
- Ride-sharing services and taxis
- New clothing and accessories
- Coffee from shop/restaurant
- Events (e.g. concerts, sports)
Americans are eating out more, as a cost of almost three times the amount spent on clothing. The amount Americans pay for coffee also rivals the amount spent on new clothing. If you plan ahead, you can still enjoy some of these expenses within reason, but take some time to make a savings budget and keep everything in moderation. You can still enjoy life and leave something for later.