Recent research has shown that if an average smoker quits around the age of 20, they could potentially become a millionaire by the time they retire. In a report for the Investor’s Chronicle, Paul Claireaux points out that investing £7.60 per day (the cost of a pack of twenty cigarettes) into certain retirement funds starting at age 20 could grow to nearly £1 million by the age of 65.
These figures take inflation into account, projecting an accumulated fund of approximately £2,843,068, with an actual value of around £935,865. This scenario assumes a basic tax rate payer earning £35,000 annually, receiving a 20% income tax reduction on retirement fund contributions, and a 60% employer contribution to the fund.
Many people, especially in countries like the UK, Australia, and the US, where tobacco taxes have significantly increased over the past two decades, now realize how expensive smoking has become. A lot of smokers are not only trying to quit altogether but are also looking at alternatives like e-cigarettes, which are less costly and healthier.
Though quitting nicotine is tough, many people understand the health and financial benefits of stopping smoking. E-cigarettes and vaping accessories tend to be 50% to 70% cheaper than traditional cigarettes and pose fewer health risks. The initial cost for a starter pack is around £40, but after that, maintaining the habit is much cheaper. Some online retailers also offer discounts on vaporizers.
While switching to e-cigarettes might not make you a millionaire, those who do and save the difference will certainly have a stronger retirement fund compared to those who stick with traditional smoking.