As I walked out the door where I had just made what I thought was a simple, brilliant presentation, I found myself shaking my head. I received push back from a few millennials about saving now for retirement. I get it—retirement seems “a long way off” to them. But, I also thought, “if they don’t take care of funding their retirement now, there won’t be much income for them later.”
To make ends meet when they are 70, they may have to work a low-wage job instead of enjoying time with their grandkids, seeing the world, or whatever else they envisioned doing in retirement. I thought – you know, Wal-Mart only has so many greeter openings available.
Over the next few days, I could not get this experience out of my head. “Why couldn’t I get through to these people?” Of course, I eventually had the proverbial “A-HA!” moment. I wasn’t speaking their language, and despite being a dashingly handsome silver-headed, salt-and-pepper bearded dude with two millennials of my own, I had failed to connect.
I recalled the four objectors quipped about how they couldn’t afford to contribute to a 401(k) plan as they gingerly sipped from a venti cup from the country’s largest purveyor of barista-driven concoctions. “Hmmm, I bet each one probably drinks at least one of these every day.” Whether the brew is a Blonde, a Dark, or from some place named after a Pike, the average cost of their basic coffee is $3 per cup. However, if that cup is one of the more exotic versions, well, that’s a different ball game bringing the average cost to $5. “Grande chai tea latte, 3 pump, skim milk, no foam, extra hot, please!” Seriously? I thought building strong portfolios was complicated! The challenge of mastering the language of ordering coffee is beyond my capabilities.
I wondered how much “retirement money” they were spending, so I did some quick math (something at which I excel unlike ordering complicated cups of “Joe”.) If they drank one coffee every work day, that equates to $15 a week ($3 x 5 days). Now, if instead they invested that $15 a week into a 401(k) that earned a conservative average of 5% a year for 30 years, what would that result be?
(Pretend you’re hearing lots of expensive computer calculation noises…) It’s $50,000! Yes, these early to late 20-somethings can generate at least $50,000 for their retirement years simply by making a different choice.
What’s more – If you assume that they add a little soy to their java, the cost of each cup is now $4 instead of $3 and that retirement savings number balloons to $66,500. Who can’t use another $50 – $60k for retirement? I sure can.
My point is, yes, almost anyone can afford to contribute to a 401(k) plan and save for retirement. It is a matter of choice. Make your own cup of coffee at home. Remember – it’s good to the last drop! Yes, I know – so 1970’s!
Now, if you will excuse me, my tall, no-fat latte with caramel drizzle is at the bar…
This information is not intended to provide specific tax, legal or business advice and may
not be relied upon for the purpose of avoiding any tax penalties. Lewer Financial Advisors is
a multi-state registered investment advisor domiciled in Missouri. Lewer Financial Advisors
is a member of the Lewer group of companies.