Recent research shows that if an average smoker quits smoking around the age of 20, they could easily become a millionaire by retirement. Paul Claireaux, in his report for the Investor’s Chronicle, explains that investing the daily cost of a pack of cigarettes (£7.60) into retirement funds starting at age 20 could grow to almost £1 million by the age of 65.
These figures take inflation into account and estimate the actual accumulated fund at £2,843,068, with its value projected at £935,865. However, this assumes you’re a basic tax rate payer earning £35,000 a year, getting a 20% income tax reduction on retirement fund contributions, and a 60% employer contribution.
Still, significant savings can be made by stopping smoking. Many smokers, especially in places like the UK, Australia, and the US, where tobacco taxes have risen sharply in the last 20 years, now realize how expensive smoking is.
Many are trying to quit or switch to e-cigarettes, which are both cheaper and healthier. Quitting nicotine can be tough, as any smoker knows. Yet, more people are becoming aware of the health and financial benefits of quitting.
E-cigarettes and vaping equipment are reported to be 50% to 70% cheaper than traditional cigarettes and carry fewer health risks. There’s an initial cost of about £40 for a starter pack. After that, maintaining nicotine intake with e-cigarettes costs less than half that of traditional cigarettes. Some online retailers even offer discounted vaporizers.
Though the savings might not reach a million pounds, those who switch to e-cigarettes and save the difference will have a healthier retirement fund compared to those who don’t.