A recent survey
finds that 21 million Americans aren’t saving any money for retirement. Though it may seem daunting, Americans can start building that nest egg now – without it being a major burden, according to an Investor’s Business Daily article
A common reason people give for the lack of savings is that they can’t afford to put any money aside after paying for daily expenses, the article says. The author counters that there are ways to divert some money to savings without really missing it, and with compounding interest, the small contributions could eventually amount to a substantial retirement fund.
For example, the author suggests buying a less-expensive cup of coffee each morning, and drink water with your lunch instead of a soft drink just one day a week. Let’s say that saves you $2.50 per day. That adds up to just over $910 per year. Look where that small savings could be in a few decades:
Allowing for inflation driving up the cost of your food each year, if you invest the savings and it earns 6 percent a year on average, by year 30 you've got $120,580.
The article provides other examples of small money savings now that could add up later.
Want more ideas? Here’s another list of penny-pinching tactics
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