Early Retirement Blog

The retirement industry uses your “Starbucks” coffee habit, to illustrate how even small amounts of money, can have a large impact on your retirement. In the retirement industry example, they point out that if you took the money you spend in coffee, and invested it instead with them, after so many years of compounding returns – you’d be a bazillionaire!

The retirement industry is correct, assuming you achieve the presumed returns on your investment, you will end up with a handsome sum of money. And by all means, you should brew your own cup of coffee, use a thermos, invest the money and cut down on waste.

However, the “Starbucks” coffee example, is a good one to point out the difference between the retirement industry approach to retirement planning, and the iPlan Retirement approach. The retirement industry calculation tells you how much you can earn by investing the coffee money. The iPlan Retirement approach takes it two steps further, and tells you how much you need to save in order to continue your “Starbucks” habit, and how much longer you need to work.

Using the Green Retirement formula,  we can calculate that to continue your “Starbucks” habit in retirement will cost you an additional $15,000 in savings, and require approximately 1 extra year of working depending on your savings rate. That’s right, imagine working an extra year, to have the pleasure of standing in line to drink mediocre coffee. Is it worth it?

So, small amounts of money, do have a large impact on your retirement. The retirement industry shows how much you can earn, Green Retirement Planning shows you how it affects your retirement both in savings and time, retirement planning is about more than just investment returns.  Try the Free Green Retirement Calculator.

Learn more about Green Retirement Planning – And find out how you can save your retirement and the planet!