How Cigarettes Could Send Your Retirement Up in Smoke

By Selena Maranjian Markets

It's probably obvious even to non-smokers that cigarettes have gotten more costly over the years. About 20 years ago, in 1996, the average retail price of a pack of cigarettes was around$1.85. Today, it's closeto $7.30. That's just the average, though -- the price varies extremely widely depending on a purchaser's location. No matter where you live or how much you pay per pack, your smoking habit is stealing from your retirement.

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Check out the table below, which presents the average price of a pack of cigarettes in 2016 for each of our 50 states and the District of Columbia. The averages are from the folks at, which issues a price roundup each year. (Note that a sizable chunk of most of the prices is made up of state excisetaxes, which ranged from $0.17 per pack in Missouri to $4.35 per pack in New York, as of August. Many cities and/or counties in each state also impose taxes.)





Avg. Price per Pack



Cost of a Pack a Day Over One Year



Cost of a Pack a Day Over 20 Years



























North Dakota




















































































North Carolina












West Virginia












































































































South Carolina




























































New Hampshire
















































South Dakota
























New Mexico












































































































Washington, D.C.












New Jersey








































































Rhode Island
















































New York











Data source:, author calculations.


Big costs, big damage

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Clearly, a single pack of cigarettes is rather costly in many locations. Even the lowest price, in Kentucky, costs more than $5 -- and in 20 states, the average price tops $7.25, the current federal minimum wage rate.

That can certainly put a crimp in a smoker's spending money, but it can have an even more disastrous effect on their financial future. Every dollar that goes toward cigarettes is a dollar that could have been deployed in some other way, such as on contributions to retirement accounts. The table above shows just how much is lost via a smoking habit. Imagine, for example, that you're in Michigan with a one-pack-a-day habit. That's costing you around $2,774 per year -- not that far from $3,000! And over 20 years, it's more than $55,000. It will likely be much more than that, though, as the price won't stay at $7.60 per pack, but will likely keep rising over time. Smoke two packs per day? You're looking at losses well above $100,000 over 20 years, enough to make a very meaningful difference to your financial security in retirement.

Image source: Pixabay.


It's even worse than that


As some ads say, "But wait -- there's more!" You're actually losing more than that $55,000 or $100,000-plus from our example above. That's because if you spend $3,000 per year on cigarettes instead of, say, retirement savings, you're not just giving up the $3,000 -- you're also giving up what it would have grown into over time. For example, if you were to invest $3,000 each year for 20 years, and it grew by an annual average of 10%, you'd end up with about $189,000. Two packs a day? $378,000! And remember -- in many states, it would be far more than that.

Meanwhile, know that the average Social Security retirement benefit was recently $1,348per month. If you're spending $3,000 per year on smokes, that's more than two months' worth of your Social Security income, up in smoke.


Nonsmokers can be hurt, too


Don't let yourself be smug if you're a nonsmoker. All of us routinely spend dollars in ways that don't serve us best. There's little harm in treating yourself to a fancy coffee now and then, but if you're spending $5 per day on a large coffee concoction, you're giving up as much as many smokers do. Think about your drinking habits, too. If you're spending $5 to $10 per day on beer, wine, scotch, or a relaxing margarita or two, you're losing out on substantial retirement savings just like smokers are.

Image source: Pixabay.


More costs to consider


Of course, smoking is costly in other ways, too. It's harmful to your health and is the leading causeof preventable deaths in the U.S. Those who smoke tend to live 10 feweryears than non-smokers -- so you're most likely literally losing years of life by smoking. Smoking is also costly to society. The Centers for Disease Control and Prevention notesthat tobacco use costs the United States more than $300 billion a year, including nearly $170 billion in direct medical care for adults and more than $156 billion in lost productivity.

Quitting smoking is notoriously hard but also extremely worthwhile, as it will likely have you gaining thousands (if not hundreds of thousands) of dollars and gaining years of life to enjoy, too -- years that are likely to feature better health. If you smoke, consider whether you want to double down on trying to quit. If you're a non-smoker, consider sharing this article with a smoker you care about -- and think about what costs of your own you might cut in order to turbocharge your very important retirement savings.

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Longtime Fool specialistSelena Maranjian, whom you can follow on Twitter, owns no shares of any company mentioned in this article.Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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