A few minor adjustments to daily spending habits could have a major impact on the financial security of Canadians in retirement, according to TD Waterhouse.

By “brown-bagging” lunch three times a week, buying bottled water in bulk and commuting to work on public transit, a 35 year old today could add $261,124 to their retirement nest egg at age 65, says TD Waterhouse.

TD Waterhouse calculated the potential savings for a 35 year-old worker who earns a gross annual income of $60,000 and plans to retire on January 1, 2036.

Assuming the average lunch in a food court costs about $7 and a brown-bag lunch uses about $2 in groceries, the worker will save $15 per week, $60 per month or $720 per year.

If the $60 a month in savings is invested in an RRSP using an equity growth mutual fund with an annual rate of return of 7.2%, it would be worth $73,229 at retirement.

Tax credits from the RRSP investments will also help. With a marginal income tax rate of 32.98%, the worker will gain an additional $237 tax credit every year, which he then claims in the following tax year and invests in the same mutual fund. This nets him another $21,429 at retirement, bringing the total windfall from the 3x per week brown-bag lunch to $94,658.

Additional savings can be found by buying bottled water in bulk once a week at $3 for a dozen bottles rather than paying $1 per individual bottle. Using the same investment assumptions that accompany the lunch plan, the worker’s annual savings of $432 and annual tax credit of $142 would add $56,777 to his retirement nest egg.

Taking public transit to work can also free up cash for savings. Buying a monthly transit pass for $90.50, saves an estimated $8 per day in parking, or a net savings (minus the transit pass) of $69.50 per month or $834 on an annual basis. Investing the monthly transit pass savings and the year-end tax credit, earns the worker $109,689 by retirement.

According to the 2006 TD Waterhouse Investor Poll, Canadian investors say they will need on average a nest egg of $894,000 to retire comfortably. “That’s a large amount of money to think about,” says Patricia Lovett-Reid, senior vp, TD Waterhouse Canada Inc.

“Instead, think about ways to cut $41 a week from your discretionary spending and investing it in your future. That makes the target much more attainable.”