Is investing $100 a week enough to fund retirement? / 85

When it comes to retirement, one question comes up again and again: How much is actually enough? It’s common to see advice online that says to invest a certain amount every week, but it’s much harder to know whether that number will actually get you where you want to go.

In this episode, we break down one of the internet’s most common investing questions: Is investing $100 a week enough for retirement? We walk through the math behind what consistent investing can grow into over 20, 30, and 40 years, explain why time matters just as much as the amount you invest, and share a simple framework you can use to figure out whether you're on track for your own retirement goals.

If you've ever wondered how much you really need to retire — or worried that you're not investing enough — this episode will help you think through the numbers with more confidence and less overwhelm.

✨ Episode Highlights ✨

• [00:00] Is investing $100 a week enough to retire? The five factors that determine the answer.
• [02:30] How $100 a week can grow over 20, 30, and 40 years — and why time is your biggest advantage.
• [06:30] A simple way to calculate your retirement number using your expected annual spending and the rule of 25.
• [08:00] How Social Security and other income sources can reduce the amount you need to save on your own.
• [09:30] The retirement expenses people often forget to factor in — and the ones that may disappear altogether.
• [11:30] Why your retirement contributions don't have to be perfect to keep making meaningful progress.

✨ Resources ✨

• Investor.gov compound interest calculator
• Vanguard retirement expenses worksheet
• Retirement calculator (Merrill) 
• SSA.gov — My Social Security account
• Rule of 25 retirement planning framework

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Transcript

SPEAKER_01 0:00

How much is enough? It's a question we talk about all the time on the Finance Girlies podcast. And today we're answering a version of this question that's all over the internet.

SPEAKER_00 0:08

And that is, is investing $100 a week enough? Even if you're not investing $100 a week, this episode walks you through a framework you can use to find out if you're currently investing enough to retire whenever you want to. So if you've ever wondered how much you should be investing for retirement or how much investing $100 a week will get you, this episode will walk you through all of that. Do you want a chance to hang out with other finance girlies in a warm and welcoming community? We're launching our very first Finance Girlies book club in August, and we would love to have your cute little face join us. We're kicking off with The Simple Path to Wealth by JL Collins, which just so happens to be the book that convinced us to start investing now instead of holding it off for a hundred more years. The book club is totally free to join, and we'll meet twice throughout the month to discuss and make new friends. Sign up now at thefinance girlies.com slash book club. Links in the show notes. So let's talk about is investing $100 a week enough to live off of in retirement? And we'll start by saying that investing $100 a week is $5,200 a year.

SPEAKER_01 1:11

And whether this is enough depends on five different factors. So first of all, how much, if anything, you have already invested, how many years you plan on investing $100 a week, what you invest that money in, how much money you need to live off of in retirement, and then what other sources of income you can expect in retirement.

SPEAKER_00 1:33

Pension, social security, things like that. In general, these are kind of the five things that you need to focus on. But really the main things that are gonna influence whether $100 is enough is how long you're going to be investing $100 a week, like what your time horizon is, right? Like how many years do you have to do this thing that you're gonna set out to do before you retire. And then also like how you plan on investing that money, because that's gonna determine how much it grows and how much you actually need to save yourself to reach that number. And then lastly, just like how much money you need to live off of in general, because it if you can save up a million dollars in that time, it might be enough for some people and it might not be enough for others, depending on what your actual living expenses look like. So we're gonna kind of walk you through some of these scenarios now. Emily and I have done the math using an investor.gov calculator, which we'll link in the show notes below, to figure out what investing $100 a week will look like, depending on if you do it for 20 years, 30 years, or 40 years. So we'll talk about that now. And for all of these scenarios, we used an annual return of 7%. So that's the interest rate or the return that we entered into the calculator. This is the stock market's historical average real return that accounts for inflation. So this is just like a good average number to go based off of. And we also assumed in all of these scenarios that you are starting with zero dollars invested, like you are completely starting from scratch and don't have any existing investment accounts.

SPEAKER_01 3:01

So if you're investing in the stock market and you're well diversified and investing appropriately for your age and time horizon, this is probably an average return that you can expect, more or less. So that said, let's run through a few different scenarios. So say you have zero dollars invested, but you can invest $100 a week for 20 years. Over those 20 years, you will have contributed $104,000, but your total balance after those 20 years at a 7% return will be $213,176.56.

SPEAKER_00 3:39

So that means in all, you have contributed about like less than half of what your total balance is. Your total interest will be like just over $100,000 too. So it's like an extra $100,000 that you did not have to save yourself at all because you gave yourself 20 years with a 7% return to earn all of that extra money.

SPEAKER_01 3:58

Okay, next scenario, you invest $100 a week over 30 years for a total contribution of $156,000. You would end up at a 7% rate of return with a total balance of $491,196.09.

SPEAKER_00 4:17

And in this scenario, even though you've contributed $156,000, you've gained over $335,000 in interest. That's $335,000. You did not have to save yourself. Compound interest did the did the heavy lifting for you.

SPEAKER_01 4:32

And then over 40 years, say you invest $100 a week, over those 40 years, you would have have contributed $208,000. And your balance at retirement after $40 years would be around $1,038,102.58.

SPEAKER_00 4:49

Yeah. So in this situation, the total interest that you've gained inside this account is $830,000, which is like this type of math gets really mind-blowing to me personally because you have contributed $208,000 and yet because you gave yourself 40 years to do it, $830 extra thousand dollars. You did not have to save yourself that. I can look at that $5,000 a month and say, okay, like when I'm retired, do I hope to be able to have more money that I can spend? Like, do I feel like I'm being really restrictive on the $5,000 a month I'm spending now? Like, do I want to bump that number up a little bit? Is that number way too much? Like that's kind of a personal question for you to answer. But let's just say that I'm like, actually, $5,000 is plenty of money for me to live off of a month. That number feels really good. Then what I would do is I would say, okay, well, if I need $5,000 a month to live off of in retirement times 12 months a year, that means that I need $60,000 a year to live off of. And so then what you can do is there's this rule called the rule of $25 that you can use to figure out like how much money you actually need in retirement to retire. And you just take whatever your annual expenses are and you multiply it by 25, and that gives you your target retirement number. So if I want $60,000 a year to spend and I multiply that by $25, I need $1.5 million to retire, which at first glance, $1.5 million could feel like a gigantic number to you, especially if you're starting from zero. But keep in mind these time horizons, first of all, that we mentioned, the sooner you can start investing $100 a week, ideally the longer you'll have to invest and the more time you'll have for compound interest to do its thing. And in the 40-year example, like we said, I could only need to save $208,000 to end up with a million dollars already in retirement if I just gave myself 40 years to do it. So keep that math in mind. But also just because you need a certain amount of money to live off of doesn't mean that you have to save every single penny of that yourself because you will likely have other sources of income too. For example, in 2026, the average Social Security check is just over $2,000 a month. So $2000 times 12, that's already $24,000 of the $60,000 I would need per year to live off of that I don't actually need to account for in retirement. And let me caveat this by saying that you can actually already create an account on the Social Securities website. You can just go to SSA.gov slash my account. And if you create an account, it will tell you that right now, based on whatever income you've made over the past X number of years, what your average social security check is projected to be. So no matter your age, you can go ahead and log into that account and see what that average number is. And then what you can do, remember earlier I said that I plan on needing $60,000 a year in retirement. But if I know that I'm expected to get $2,000 a month from Social Security, which is $24,000, and I could actually take that $60,000, subtract $24,000 from it. And now I just need $36,000 a year. Like I need my retirement accounts to generate that much. So then if I multiply that number by $55, my new target retirement account balance number is $900,000. So now instead of $1.5 million, I just need $900,000 in my investment accounts to retire at $65, for example. So then that automatically makes my math feel more doable, right? And so you can use kind of that same logic to figure that out for yourself.

SPEAKER_01 9:43

I wanted to mention a few considerations for when you're trying to project your target retirement number, specifically when you're thinking about your expected annual expenses, because you might think of retirement as being, you know, you want to like live this lavish life and travel all the time and have all these hobbies. And that may very well be the case. But you should also think about the expenses you won't have in retirement. So ideally, your kids will be on their own and you won't be paying any of their expenses. Maybe your mortgage will be paid off. You won't be saving for a retirement anymore. Like if savings is a huge chunk of your current budget, that's something that you will have essentially finished saving. So that won't be like a line item in your budget. So there are things that you won't necessarily have to factor in that can be things that are eating up a big chunk of your expenses right now. Um, but then some things, of course, may, you know, take up a bigger portion like healthcare, you can expect probably to pay more. And then again, if you plan to spend more time traveling or giving, whatever it is, just consider, I guess, what a realistic life looks like for you in retirement. So another point when we talk about the time you have to invest, 20 years, 30 years, 40 years. Obviously, the sooner you start, the better, because the more time you have to contribute and for those investments to grow. But another kind of like lever you can pull is delaying your retirement as much as possible. And that can either be by working longer, or it can also mean just delaying when you take social security, because that also impacts how much that monthly check will be. Um, so those are also considerations to keep in mind.

SPEAKER_00 11:31

Just to kind of wrap up, like, is saving $100 a week enough to retire? It highly depends. It it could very well be, depending on how much money you need to live off of. But we also just want to remind you that like you may not be able to save $100 a week consistently all the time, straight across 20, 30, 40 years or however long you plan on doing it. And that's okay. You can save more when you have more, and you can save less during later times. And the goal is for all of it to even out so that you have the money that you need to live comfortably whenever you do decide to retire. And I think Emily and I are both personal testaments to this. Like I have gone through seasons where I'm able to max out my retirement accounts some years and save very little in them other years, depending on my income. And that is truly just life. So don't beat yourself up if you set out to save the same exact amount every single week or every single month, and you're not able to do it, depending on what season of life that you're in. Just do more when you can and it will all even out.

SPEAKER_01 12:35

If you want to run some of these scenarios for yourself, be sure to check the show notes for some calculators that we recommend. These can help you estimate your expenses in retirement and also figure out how much you need to be investing each uh week, month, year to hit that goal. With that, we will see you next week, girlies. Love ya. Bye. Have you ever picked up a personal finance book with great intentions only to give up before chapter two? Or maybe you finish the book, but we're left with a bunch of questions and no one to answer them. If learning about personal finance is something you care about, or but you're craving a welcoming, fun, and community-oriented approach, join us for the Finance Girlies Book Club. We're kicking off in August with The Simple Path to Wealth by JL Collins. It's the book that encouraged both of us to start investing, and we can't wait to read it with you. Book Club is totally free. Just sign up using the link in the show notes or head to thefinance girlies.com slash book club. That's a wrap on another episode of the Finance Girlies Podcast. Nothing in this episode is meant to be taken as financial advice.

SPEAKER_00 13:38

Please do your own research and talk to a professional if you need advice. If you like this episode, consider leaving a review. Better yet, add another show to a friend who might enjoy it too. Love ya. Bye. Nailed it.