If you were to ask your 4 year old if you can live with them when they grow up, they’d likely reply with an enthusiastic “I wanna always live with you; I never wanna live in another place from you!”.
Ask them again when they are 35 and their answer may be different.
Maybe you’ll choose to live with your adult child, but it might be nice if you have other choices too. Planning for affordable housing before you are the older adult is something that cannot start too soon.
Do a quick calculation to see if living with your kids will be optional. Without putting in identifying information or creating an account, Dave Ramsey’s retirement calculator will show an estimate of your retirement savings. It will even show you what you can save if you skip the daily coffee purchase, but you don’t actually have to look directly at that number.
Compound Interest Example
According to AARP’s retirement planning article, “the earlier you start saving for retirement, the better off you’ll be. If you start putting $5,000 a year into an IRA at age 30, you’ll have about $669,400 at age 70, assuming you earn 5 percent a year. If you start at age 50, you’ll have $186,860. Although it’s never too late to start saving, it’s a lot easier if you start early.”
Fidelity Investments’ 8 moves to help snowball retirement savings has tips for those in their 20s and 30s. Additionally, Dave Ramsey’s How to Save Money: 23 Simple Tips has some truly practical ways to save money even if you can’t imagine cutting expenses.
And as a backup plan, you could always ask your four-year-old to put the “you can always live with me” in writing, especially if you plan on continuing your daily Starbucks habit.