5 Expenses that are Stealing $1 Million of your Retirement

Published on October 18, 2016 by Lauren

This post may contain affiliate links. For more information, take a look at my disclosure policy.

This post may contain affiliate links. For more information, take a look at my disclosure policy.

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    5 Expenses that are Stealing your Retirement

    Most Americans are not ready for retirement.

    In fact, “nearly half of families have no retirement account savings at all,” the Economic Policy Institute (EPI) reported. In September of 2016 CNBC reported that “the average American between the ages of 56 to 61 has retirement savings of only $163,557.”

    This is a problem people… why is this happening? Yes, life is hard. And expensive. But we live in the most prosperous time and in the most prosperous country in the history of human civilization. We have no excuse! And we find ways to spend money on all sorts of things.

    So I found just 5 expenses that most Americans make that are stealing your retirement… that if you simply stop or adjust, you be over $1 million dollars richer by the time you retire.

    Mark and I contribute to our retirement through both a 401K plan through Vanguard and also through Betterment. Betterment offers great IRA's which are great for tax deductions as a self employed business owner. You can check out Betterment here.

    Here are the 5 Expenses that are Stealing your Retirement:

    1.) Car Payments

    According to CNBC the average American family has car payments that total $503 per month. Instead of paying that $503 to a car payment, you put the $503 into a fund earning 6% internet for 30 years, you would be $505,271 richer by the time of your retirement.

    So – what do you do instead of pay a car payment? You need one right? The first thing is to understand how important it is to know how to maintain your car in the smartest and most frugal way possible.  Don't be afraid of driving well-used cars! Instead of trading in and upgrading your car once it reaches 100,000 miles, you can buy a car with cash at 100,000 miles and drive it for another 100,000!

    Lots of people do it!

    2.) Cell Phone Bill

    The average monthly cellphone bill is $73.00 according a 2014 J.D. Power report. Verizon Wireless customers paid an average $148 per month, AT&T and T-Mobile customers shelled out an average of $144 per month. That means that for my family of six, we could be looking at a $438 per month when all of our kids are grown and ready for their own phones.

    If you switch to a phone company like Republic Wireless and get on a comparable plan, you would pay around $20 per month instead of $148, a savings of $108 per month if you have 2 lines! If you placed that savings in a retirement fund like an IRA, 30 years later it would grow to $108,488!

    3.) Your Grocery Bill

    When I am working with clients in my online Financial Renovation Course, the #1 area where they are overspending is on their food budget. American's spend an average of $1,100 at the grocery store per month. When I was in $40,000 worth of debt, this was the first expenses I tackled and I took our grocery bill from $1,000 per month down to $200 per month. I fed my family on this amount for three years, and eventually increased our grocery budget up to $125 per week when our family grew to four children.

    I keep my budget this low by using my own ALDI MEAL PLANS and by Freezer Cooking. Check out how it is done below – super easy and for only $150 I make a months worth of dinners!  If you are interested in this meal plan, you can purchase a plan here.

    If you found a way to save $400 per month on your groceries and instead put that money into a retirement account earning 6%, you would have an additional $401,806 in your retirement account in 30 years!

    4.) Student Loan Payments 

    The average class of 2016 college graduate has $37,172 in student loans and pays an average of 6% interest on that loan.

    Student Loan Consolidation

    Credible.com reports that their borrowers who re-finance through them and chose a loan with a shorter repayment term, ended up reducing their interest rate by 1.71%. They will end up paying an average of $18,668 less over the life of their new loan, as well as paying it off 59 months quicker.

    If a 30 year old with student loans refinances and the loan is paid off in 15 years and the monthly savings was placed in a retirement account, at age 65 they would be $47,373 richer.

    sofi-logo

    Interested in re-financing your student loans? We recommend using either Credible.com or SoFi.

    5.) Insurance Costs

    Lowering your insurance costs is not as hard as one may think, in fact many do not even know that they can be lowered.

    Here is the key –  search for an independent insurance agent and let them do the shopping around for you.  We were able to shave $100 per month off our monthly insurance bill just by using a free independent insurance agent.

    If you were to take that $100 per month and invest it for retirement for 30 years, you would be $100,451 richer! For a simple change like this, I would say that is worth it!

    In summary, if you make these simple changes to your monthly budget, then take the money and set it aside in a retirement account, you will be $1,133,253.00 richer when it's time to retire!

    In my opinion, many of these expenses can be easily reduced and the rest saved for retirement. Stop letting them steal from your retirement, and reduce them today.

    COMMENTS

  • Lauren, what foods did you eat? My kids and I are on special diets (GAPS/Paleo), and we spend about$1000 a month on food. It is insane. I know some areas.where I am spending more than necessary, and we buy organic meat as much as possible and only some produce as organic. No boxed foods, most everything from scratch. Do you buy the cheapest cuts of meat and conventional produce, also lots of pasta? I can’t imagine eating this way for the price you cited.

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