Is a Potential Retirement Going up in Smoke?

There are so many reasons to quit smoking right now. If you don't want to quit because of the risk of cancer, heart disease, emphysema, COPD, high blood pressure, bad breath, and premature wrinkles, then at least consider quitting for the financial benefits. Don't allow potential retirement money to go up in smoke! If you are a smoker that has ever wondered how much you would save by quitting then keep on reading. If you smoke one pack of cigarettes daily, the money you could save/use to invest in a retirement could leave you with over $175k in just 20 short years (maybe more based on your individual circumstances and tax deferred investment opportunities through employers). Some may say 175k isn't enough to retire...but the alternative is to burn away money every time you "flick your bic." Besides, if you quit smoking right now you increase your chances of actually enjoying your retirement days.  

Smoking is quite expensive!

Here is what you can actually save by quitting TODAY:

1 day = $5.31  

1 week = $37.17  

1 month = $159.30  

1 year = $1,938.15  

10 years* = $25,546.36  

20 years* = $71,295.99      

* Based on price of cigarettes increasing 6 percent annually.

Here is the www.bankrate.com investment calculator results based on money saved by NOT smoking one pack a day for 20 years. (I used the total 20-year savings of $71,300.00 dividing it over 20 years equally, although the cost of money spent on tobacco is gradually increased from 1-20 years. I'm sure there is a way to calculate the investment with a gradual increase in investment, and maybe the numbers come out different. I just couldn't reference anything that specific.)

   
Your Individual 401(k) could be worth $176,192.71 after 20 years.
This was calculated with your current contribution of $3,565.00 per year and a current Individual 401(k) balance of $0.00.     

Results Summary:
 
Current Individual 401(k) balance
$0.00
 
Years to invest
20
 
Annual rate of return
8.00%
 
Self-employment income
$10,000.00 (worst case scenario)
 
Your individual contribution
$3,565.00 per year
 
Total you will contribute
$71,300.00
 
Total at age 60
= $176,192.71

I have been a Registered Respiratory Therapist in the state of Georgia since 1996.  However, I am not going to tell you "how" to quit smoking in this particular blog.  Instead I will leave you with a downloadable booklet to read about smoking cessation, for all who are interested. The booklet is supported by the American Heart Association, American Lung Association and the American Cancer Society. 

http://www.smokefree.gov/pubs/Clearing_the_Air_508.pdf

I do disagree with one section of the booklet. It is the information on cost of tobacco and money spent over a 20-year time period. I found a different chart based on today's cost with applying a 6 percent annual increase on the 10 and 20 year marks. The booklet's 20-year mark is based on today's pricing and we all know that's not going to be the case. Twenty years ago in 1992 the cost of a pack of cigarettes was $1.59, considerably less than today's price of $5.31.

The above investment calculator results does not apply to everyone. This is merely an example provided to give an idea of what one spends on cigarettes and how that money saved can be used to invest. The website used to obtain the above information is www.bankrate.com. They have many investment calculators and tools for referencing. Visit their site to see which one best fits your situation. The above example is based on an individual who makes only $10,000/year and is self-employed. It isn't realistic to think someone that makes $10,000/year can invest $3565/year on retirement, but this was a generic number chosen so it did not exceed any investment caps or limitations. Smokers who smoke one pack a day spend an average of $3,565/year on cigarettes over a 20-year period. So the investment money is available to you.

Always remember.....you will only get one body in this lifetime, so be good to it!

If you would like to ask me any questions about local support for smoking cessation, pulmonary physician resources, or just general questions about respiratory therapy, please feel free to comment and I will promptly respond. If I don't know the answer I will find out from someone who does. I want to support anyone in the community who wishes to stop smoking. I also welcome any investors to comment on or correct the above calculations if you have any advice you would like to share. 

Lynne van Buul, RRT, RCP

Bella Derma Medspa, Inc.