The majority of my coworkers go out to lunch every day. They typically spend around $10 - 15 per day. I talked to my dad, and he eats out at Whole Foods and then gets an expensive Starbucks coffee which amounts to $25 a day. Both my coworkers and my dad talk about how hard it is to retire in this country. "It's expensive to live. You work for years, and what do you have to show for it at the end?"
This coming from my dad frustrated me, because he's nearing retirement age. He's worked a $100,000+ year job as a 1099, but has no savings and he is 69 years old. He'll get the maximum Social Security which will be enough to survive on. However, if he decided to only spend $9 a day on lunches and invest the other $16 per day in a Roth IRA, he would have almost $900,000 sitting in his account. Using a 4% SWR + Social Security, he would be living quite comfortably (about $6,500 income per month).
To reiterate, if you can cook your own lunch and invest $16 a day inside your Roth IRA, you'll have almost $900,000 after 40 years (assuming a 7% real return). A lot of people cannot afford to invest $4,160 ($16 per day * 260 working days) per year. However, if you tighten your budget, even a little, and your income is > $40,000 per year, accomplishing this shouldn't be too hard. The average income in the USA is about $38,000 and the median is closer to $50,000. Statistically, about half of all Americans can accomplish this. I say this based on the fact that achieving a 10% savings rate isn't terribly difficult.
Submitted March 10, 2017 at 06:05PM by zerodayfinance http://ift.tt/2lM7xq0
