Worried that you missed out on critical personal finance education growing up? Don’t worry, Matt McCall has you covered. In this episode of his “MoneyLine” podcast, he sits down with InvestorPlace producer Dave Maxwell — a self-professed average young man — to discuss the basics.Many young people, Maxwell included, feel intimidated when it comes to saving for retirement. McCall doesn’t blame them, but that doesn’t mean he’s giving young folks a free pass. Instead, he talks with Maxwell to learn just why retirement is so scary — and often unapproachable.
The two agree that it’s often hard to visualize long-term goals, which makes it even harder to save for them. If you can’t imagine exactly how much money you’ll need when you’re 65, how will you feel inspired to cut down on your subscriptions from Netflix (NASDAQ:NFLX) or Apple (NASDAQ:AAPL)? But if you want to save $1 million for retirement (the often-cited amount to aim for), there’s no time like the present.
Still having a hard time visualizing the future? In that case, here’s some of McCall’s quick math. If three working adults each save $120,000 for retirement, but they start at ages 25, 35 and 45, respectively, their retirement savings accounts will look much different at age 65. In his example, the man who started saving at 25 ended up with over $1.4 million by the time he was ready to retire. On the other hand, the man who waited until 45 only had $300,000.
McCall’s Podcast on Saving for Retirement
OK, so you already know that you need to start saving young. What if the real problem is that you have a limited amount of disposable income? McCall totally relates. In this episode of “MoneyLine” he discusses how he, too, is struck by the finer things in life. And who doesn’t love stopping by Starbucks (NASDAQ:SBUX) in the morning for a quick latte?
Well, split-second spending decisions can make a difference. To start, McCall recommends saving an extra $100 every week. For many young workers, this may mean cutting back on happy hour drinks, morning coffee or online shopping. But it can also mean paying closer attention to your monthly budget.
For example, McCall said he — along with many other Americans — made the decision to cut the cord with cable. However, his cost-cutting exercise resulted in over $100 a month in new subscription services from Netflix and Apple, and he’s still planning on jumping on Disney’s (NYSE:DIS) Disney+ bandwagon. When saving for retirement, it’s critical that young adults pay attention to their monthly expenses, whether that be eating out, video streaming services or Spotify’s (NYSE:SPOT) Premium plan. Cutting back on everyday costs can go a long way in helping save more for the future.
Oh, and if you have an employer-matched 401k plan like Maxwell and McCall, you better be maxing it out. For 2019, you can contribute $19,000 to your 401k — and that will really add up as you approach your golden years.
Listen in to this episode of “MoneyLine” for more information on saving for retirement (but most importantly, without fear).
Matthew McCall left Wall Street to actually help investors — by getting them into the world’s biggest, most revolutionary trends BEFORE anyone else. The power of being “first” gave Matt’s readers the chance to bank +2,438% in Stamps.com (STMP), +1,523% in Ulta Beauty (ULTA) and +1,044% in Tesla (TSLA), just to name a few. Click here to see what Matt has up his sleeve now. Matt does not directly own the aforementioned securities.