$30,000 for lunch

$30,000 for lunch? That seems a bit steep, especially for those of us on a tight budget.

On my skimpy budget I try to spend not much more than $4 a day on lunch. That's not so easy when a sandwich can cost $6 or more, but there are ways.

I was thinking about this and realized that $4 is about what I earn a month each month from $1,000 in T-bills. At the latest yield of 5.25%, $1,000 will earn you about $52.50 per year or $4.38 per month.

But I need $4.38 per day, so times 30 days in a month, I would need $30,000 in savings to earn my $4.38 lunch money every day. Actually, that is $4.11 per day at a 5.00% rate.

It seems to me that a lot of people spend $8 to $10 a day for lunch, so that would require $60,000 to $75,000 in savings earning 5.00%.

This is mind boggling.

It has implications for retirement.

Just to pay for my lunch after I retire, I will need $30,000 in retirement savings. Spending $10 per day doesn't seem like a lot, but that works out to a need for $75,000 in retirement savings.

If you expect that you could live on $3,000 per month ($100 per day), that would require about $730,000 in retirement savings at 5.00%. Sure, we can hope to get better than a 5.00% return with various financial "games", but most people will be lucky if they can get that $100 per day even with a gradual draw down of principal.

Anybody want to volunteer to pick up my lunch tab?

-- Jack Krupansky