Your Unused Subscriptions Could Be Costing You $25K in Retirement Savings
It's easy to overlook a few recurring charges on your bank statement. From streaming services and fitness apps to forgotten memberships, subscriptions have become a normal part of daily life for most Americans.
According to a recent survey from PensionBee, 90% of Americans pay for at least one subscription, and 1 in 3 say they have more than six. In addition, nearly one-third (31%) report spending over $100 a month on subscriptions.
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While each charge may seem minor, unused subscriptions can add up, costing you far more than you might expect over time. In fact, redirecting just one overlooked monthly charge toward retirement savings could translate into tens of thousands of dollars by the time you stop working.
Here's how your unused subscriptions could be costing you thousands in potential retirement savings.
How a $17 Monthly Subscription Can Cost $25K in Retirement Savings
The PensionBee analysis found that shifting the cost of a $17 monthly subscription service into a retirement account can boost the average millennial's nest egg by about $25,000 by the age of 67. This is due to compound growth over time.
"Your 401(k) or IRA is a long-term investment, and small and consistent contributions go much farther in the market than your bank account," said Romi Savova, founder and CEO of PensionBee. "While everyone should cancel and redirect unused spend, millennials and younger generations are most likely to see a meaningful pay-off."
What feels like a small sacrifice today can snowball into meaningful future wealth -- especially when those dollars are invested early and allowed to grow for decades.
Why Many Americans Think They Can't Afford To Save for Retirement
The survey found that while the majority of Americans pay for subscriptions, nearly half (45%) said that a lack of disposable income prevents them from saving for retirement.
That perception often comes from the idea that retirement saving requires large, lump-sum contributions. In reality, consistent small deposits -- especially when made early -- can have a big impact over time.
"It's common for retirement to feel like a 'future you' problem, especially when facing several immediate financial priorities," Savova said. "More than half of millennials are now parents, and may need to balance childcare costs in addition to rising housing prices and daily living expenses."
At the same time, she noted, younger generations also lead the subscription economy -- often without realizing how much money is slipping away automatically each month.
The Hidden Cost of Automatic Spending
Subscriptions are particularly dangerous to long-term financial health because they require very little ongoing attention.
"How many of us would pay for Netflix or Disney+ if we had to authorize the charge each month?" Savova said. "The subscription model is really convenient, but it obscures the fact that each automatic payment is also a financial choice."
Because these charges fade into the background, they're easy to justify -- and easy to forget about -- even when they no longer provide value.
How To Cut Unused Subscriptions Without Sacrificing Quality of Life
You don't need to cancel every subscription and put that money toward retirement, but you should be mindful about where your money is going. More awareness can go a long way in navigating the subscription economy.
Savova recommended checking your bills monthly to determine:
What subscriptions you're paying for
How much you're paying for them
Whether or not they are still providing value
"I don't want to say not to buy the latte or pay for Netflix," Savova said. "But when it comes to services you could live without or maybe are paying for and not using, there is no reason not to put them to work in building real future wealth."
Unconscious spending is easy, but the same can be true for wealth building.
"Cancelling unused subscriptions can leave you with money you didn't know you had," Savova said, "and redirecting them toward your retirement can help you build wealth that maybe didn't seem possible."
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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