“What if I told you there was a way you could easily make $60,000?” This was the gist of a question recently posed by a popular social media influencer. The solution? Simply eliminate your Hulu, Amazon Prime and Disney+ subscriptions. Then, invest the approximate $38 monthly savings for 25 years. An 11% return during that time period yields almost $60,000.

The math checks out, but I’m not sure the logic does.

Don’t get me wrong, $60,000 is no small amount of money, but what you actually walk away with after a hypothetical 25 years, is worth analyzing. The U.S. Census Bureau estimates the median U.S. household income to be just over $70,000. Giving up something you enjoy for 25 years, to gain less than one year of potential retirement income (even further reduced when you factor in 25 years of inflation), is a pretty poor value proposition in my opinion.

 Undefined Priorities

Yet, financial professionals, and now social media influencers, have been trotting out these examples of abstention for years. They’re often presented as if they will be the difference maker in a retirement plan. More than likely, they won’t.

This latest iteration reminded me of the many retirement plan meetings I sat through while working for a former corporate employer. Each year, the 401(k) plan provider would send one of their representatives to click through a slick power point presentation. The slides predictably included the same talking points: “Save enough to get the full employer match,” “Target Date Funds are great options,” and “Look at how much more you could save if you would just stop buying coffee!”

I’m fully behind the first two recommendations, but those presenters clearly never enjoyed a Passenger Coffee latte. At the heart of advocations to simply give up subscriptions or coffee, is a philosophy encapsulated best by the Dave Ramsey mantra, “Live like no one else, so that later you can live like no one else.” Stated more simply – delay gratification.

Delayed gratification is an effective message for immediate concerns like reining in over-spending or paying down debt. It falls short, however, as a motivator for long term savings. Why? Its primary shortcoming is prioritizing enjoyment of an all-to-often undefined retirement period over enjoyment during a person’s current working years. It’s much easier to see the benefit of paying down a debt today than it is to quantify the impact of a sacrifice that won’t be seen for 25 years.

Now and Later

As I munch my way through the candy I stole from my kids this Halloween, there’s one piece that sticks in my mind almost as much as my teeth: Now and Later fruit chews. Those fruit-flavored, chewy squares perfectly encapsulate an alternative philosophy to the hyperfocus on retirement enjoyment alone. Why not indulge in an occasional latte or streaming subscription? Enjoyment, after all, should be happening both now and later.

Realistically, we spend more years working than retiring, and if retirement is our be-all and end-all, we need to evaluate our current priorities. The sad reality is that retirement, on its own, rarely lives up to the utopian ideal we create. Studies show that it takes the average retiree only one year before growing bored.

Ironically, about two-thirds of bored retirees find greater fulfillment in going back to work. I have yet to hear one of them express regret in buying a latte 25 years earlier.

Security and Purpose

If you struggle to find the balance between now and later, you’re not alone. It’s difficult enough to define appropriated retirement saving vs. current spending without arbitrary social media sound bites promising simple savings solutions.

A disciplined, strategic savings approach, on the other hand, frees us up to spend money on things we enjoy today. After all, what you spend in aggregate is much more important than simply labeling an individual purchase as excessive. 

The goal at Evenkiehl is to create financial clarity that generates both enjoyment and financial security now and later. Adding small indulgences now, while purposefully saving for later, is just the proverbial cream in your coffee.

Jonathan is the founder of Evenkiehl, LLC, an independent, fee-only Registered Investment Advisor located in Lancaster, PA serving clients locally and across the US.