According to Jay Leno last night (or maybe it’s a rerun, I have no idea), Allstate has announced the two most difficult things for people to do: quit smoking and save for retirement. Jay’s solution: don’t quit smoking and you won’t have to worry about making it to retirement.
Seriously, quitting smoking will save lots of money. Free Money Finance calculated savings for smokers where a pack costs $5. In New York, a two-pack-a-day smoker would save $16 a day or $5,840 a year. Invested and earning 8% a year over 30 years, that’s a lost opportunity cost of $58,765.
Assuming the cost of a pack of cigarettes increases 3% each year, you’d be missing out on $133,691 if you did not invest that money.
In October 1983, New York smokers were paying $1 to $1.50 a pack. If a pack is $8 today (I’m not quite sure), that’s an annual 11% increase. Assuming a pack increases 11% each year, on top of the 8% compounded interest, you’d be missing out on $1,078,504 after 30 years.
I would say that’s a significant amount of money.
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