Are you one of the many consumers that are literally wasting your hard earned money through frivolous spending?  Did you know that reducing this wasteful spending could ensure that you have $1 million dollars at retirement?  Just a few simple lifestyle changes could make all the difference to how well you live out your golden years.

Believe it or not every single financial decision you make on a day by day basis directly impacts what your financial status will be upon retirement.   I for one have known this fact but have been blinded by it until recently, and now I’m trying my hardest to instill this fact onto my children so that they hopefully avoid the same mistake.  As stated before, unfortunately for most their decisions have them struggling in retirement or even worse working until the day they die.

Imagine this scenario for a moment:  you are married and your wife decides she wants to take an extravagant vacation to Hawaii that will cost around $5000.  Both of you have never been to Hawaii and would love more than anything you to go, especially since you need a well needed vacation.  However, let’s consider the true financial impact from a retirement standpoint.

Instead of taking that trip to Hawaii you invest this money into your Roth IRA account that sees a long term average return of ten percent each year.  From just this one time investment of $5000 your compounded earnings will be around $88,000 by the time you reach the retirement age of sixty five.  Even more incredible is that should you continue to make that paltry $7000 investment every year you could have well over $1 million dollars at retirement!  Now certainly how well the market performs will dictate how much you will earn, but even on an average return of 8% you will still have $1 million dollars at retirement.  As an added bonus, since it is in a Roth IRA all withdrawals when taken will be tax free!

Now maybe you are not thirty and have put off saving for retirement until you are forty, like me.  Unfortunately by skipping these ten years of savings we have missed out on some compound interest, however,  you will still have a nice nest egg of around $600,000 at the age of sixty five instead of around $1 million dollars at retirement.  On the flip side of this if you are younger and say in your early twenties then the investing the same $5000 per year will have you sitting on a nest egg well over $3.9 million dollars at retirement!

So as you can see, having $1 million dollars at retirement is just a matter of good financial decision, one which I wish I would’ve made twenty years ago when I was first married.  However, the future is not that bleak, as I should still be able to save enough to enjoy a comfortable retirement.  Don’t make the same mistake….start saving your way to a million dollars!