January 19, 2006
Saving for Retirement: The Lottery vs. the Stock Market
by Alicia Hansen
A new Tax Foundation “Fiscal Fact” compares the expected rate of return from the stock market to the expected rate of return from playing the lottery and declares the stock market the clear winner.
A recent survey reported that 21 percent of respondents believe the lottery is a practical way to save for retirement, but Tax Foundation data show that they would fare better by investing in stocks than in lottery tickets. A person who spends $100 per month on the lottery—slightly less than the average Rhode Island resident’s lottery expenditures—could earn an additional $144,403 over 40 years by investing in stocks instead.
Take a look at the data comparing rates of return for the two retirement strategies at various spending or investment levels, as well as per capita lottery expenditures for every state.
The Tax Policy Blog is the official weblog of the Tax Foundation, a non-partisan, non-profit research organization that has monitored tax policy at the federal, state and local levels since 1937. Our economists welcome your feedback. If you would like to send an e-mail to the author of a blog post, please click on that person's name to locate his or her e-mail address or visit our staff page here.
Monthly Archives
Disclaimer: All views expressed on the Tax Foundation’s Tax Policy Blog are those of the individual authors, and do not necessarily represent the views of the Tax Foundation, its Board of Directors, or its financial contributors. The Tax Foundation makes no representation concerning the views expressed, and does not guarantee the source, originality, accuracy, completeness or reliability of any statement, information, data, finding, interpretation, advice, opinion, or view presented.