Small changes that boost 401k by $300K
If you live to age 65 you’ve got a one in four chance of living to 90 or beyond. And some people haven’t even started saving!
Don’t panic; there are small things you can do to get a leg up. Scott Thoma of Edward Jones says small changes can generate big returns.
“Warren Buffett once said do I want to spend $300,000 on this hair cut? What he meant is that small purchases today add up to a lot tomorrow,” said Thoma. Following are 4 of his favorite money saving ideas.
1. Invest your raises
“It won’t change your lifestyle much,” Thoma said. Even if your raise is modest, Thoma says over time small amounts yield large returns
2. Put your tax refund to work
“And even if you don’t invest all of your refund, put at least some of it into retirement. If you can put $3,000 of your refund away every year for 30 years, assuming a 7% return, you’ll have an additional $300,000 by the time your retire."
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3. Bring lunch from home 3 days a week
“You’d be surprised how much you spend on what seems like small things,” Thoma noted. “If your lunch costs you only $5 a day less than you would otherwise spend, you save about $60 a month. Over 30 years that’s another $60,000 for retirement.
4. Bring coffee from home vs. buying from a coffee shop
That $3.75 doesn’t seem like much, but over a lifetime it could be a small fortune.
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