According to a recent study by STASH, an investing app, almost 60% of millennials consider playing the lottery as a potential retirement plan. And they’re not alone.
According to the study, 39% of Americans in general consider the lottery jackpot as a possible retirement plan. Interestingly, 31% of Americans think the stock market is too risky.
The odds of winning the $654 million Mega Million prize last year were 1 in 302 million. For context, the odds are better for you getting struck by lightning, being attacked by a shark, or if you’re a woman, giving birth to identical quadruplets.
To say the least, the lottery may not be the best strategy for retirement planning.
To be fair, many millennials are living paycheck to paycheck AND many carry significant student loan debt, so the idea of saving for retirement can be daunting.
But this is a missed opportunity. When it comes to investing, time is your friend. Because of the power of compounding, investing as early as you can in life is better than waiting until you have “more money” later in life. Start small – if your employer offers a 401k match, invest at least enough to take the free money. If you don’t have access to an employer retirement plan, then an IRA is another option. The key is to start early, and then slowly adjust your contributions up over time.
Finally, if you just don’t have the dollars available yet, it’s time to revisit your budget. Take a close hard look at your expenses and see if there are places to trim. If there aren’t, then it may be necessary to consider a side hustle.
The lottery is not a retirement plan. Instead of leaving your golden years up to chance, take control of your financial future and take matters into your own hands.
This information in the Financial Tips section is provided for educational purposes only and is not tax, legal, financial planning or investment advice. Neither the information nor any opinion expressed in this section constitutes an offer to buy or sell any securities or advisory products. The information provided is general and is not information reasonably sufficient upon which to base an investment decision and should not be considered a recommendation to purchase or sell any particular security. You should not regard this information as a substitute for the exercise of your own judgment. Investing involves risk.