Elaine Silvestrini, Annuity.org Writer
  • Written By
    Elaine Silvestrini

    Elaine Silvestrini

    Financial Writer

    Elaine Silvestrini is an advocate for financial literacy who worked for more than 25 years in journalism before joining Annuity.org as a financial writer.

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  • Edited By
    Kim Borwick
    Kim Borwick, Financial Editor for Annuity.org

    Kim Borwick

    Financial Editor

    Kim Borwick is a writer and editor who studies financial literacy and retirement annuities. She has extensive experience with editing educational content and financial topics for Annuity.org.

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  • Published: May 30, 2019
  • 4 min read time
  • This page features 10 Cited Research Articles
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APA Silvestrini, E. (2022, November 21). Banking on the Lottery to Fund Retirement. Annuity.org. Retrieved June 8, 2023, from https://www.annuity.org/2019/05/30/banking-on-the-lottery-to-fund-retirement/

MLA Silvestrini, Elaine. "Banking on the Lottery to Fund Retirement." Annuity.org, 21 Nov 2022, https://www.annuity.org/2019/05/30/banking-on-the-lottery-to-fund-retirement/.

Chicago Silvestrini, Elaine. "Banking on the Lottery to Fund Retirement." Annuity.org. Last modified November 21, 2022. https://www.annuity.org/2019/05/30/banking-on-the-lottery-to-fund-retirement/.

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With a retirement crisis looming, people are coming up with creative ideas to fund their golden years. On some people’s lists of potential plans: winning the lottery, marrying rich and leaving the country.

A sizeable number of folks think the lottery could be the answer to their retirement needs. This is in spite of the fact that the odds of winning the Powerball jackpot are one in 292.2 million. Compare this to the one in 1.2 million chance of getting hit by lighting in a given year.

The investment app Stash commissioned an online survey of 1,156 people and found that about 40 percent of American consumers who responded, including 59 percent of millennials, think winning the lottery could be a good way to fund retirement.

What’s more, nearly one in four millennials surveyed said they’re actually basing their retirement plans on winning the lottery.

Most people will need some kind of income to supplement Social Security. According to the Social Security Administration, the average monthly benefit for retirees was $1,468 in April 2019. That’s about $17,600 a year. The amount is not a whole lot more than last year’s federal poverty level of $12,140 for an individual.

Meanwhile, the Mega Millions Jackpot totaled $444 million as of May 29, 2019. And the Powerball jackpot was at $325 million.

Americans Lack Confidence in Investing Abilities

Many Americans feel ill-equipped to build a nest egg to fund their retirement. They find the task intimidating and beyond their skills.

Most of the people who responded to the Stash survey expressed a lack of confidence in their ability to invest in the stock market, which they find confusing and out of reach. Nearly a third said they lack the expertise to play the stock market, which they consider overwhelming.

More than 75 percent of millennials in the survey — people 22 to 37 years old — said they live paycheck to paycheck and have not built up an emergency fund.

“Playing the lottery may be fun, but it’s the opposite of a safe bet,” Brandon Krieg, the co-founder and chief executive officer of Stash, said in a statement. “Instead of crossing their fingers and hoping their lottery jackpot dreams come true, people can take concrete steps to improve their finances.”

Financial advisors, employer-sponsored plans and various online services can help individuals create manageable investment portfolios to save for retirement. Retirees can use some of these funds to purchase annuities to provide reliable income to supplement Social Security.

Retirement Savings Gamble

To some extent, with the demise of most pensions, workers are already playing what University of Massachusetts professor Christian Weller called a “generational lottery” with their retirement plans.

He explained in a Forbes article that your birth date is almost like your place on the retirement roulette wheel. Where you land determines how much you’re able to save.

Weller calculated that someone who retired in 1999 after making certain investments would have made 18 times their final earnings after 35 years. Someone who made the same mixture of investments and retired in 2018 would have gotten just 6.5 times their final earnings after the same amount of time. The 2018 retirees, in effect, are left to live on less than half the income they were making when they retired.

“Retirees will have to live with these differences,” Weller wrote. “After all, it’s not like those with 35 years of subpar financial returns can just try it again.”

This kind of gamble doesn’t happen with defined benefit pensions or Social Security, Weller noted, because those plans spread the risk over a much longer term. He suggested finding a way for workers to pool their risks so their retirement security is not so dependent on their birth years.

Lottery for Retirement Not New

The complexities and unpredictability of investing is probably largely why using the actual lottery to fund retirement isn’t all that new an idea.

The Consumer Federation of America commissioned a similar survey in 2006 that found that 21 percent of all Americans surveyed, including 38 percent of those whose incomes were less than $25,000, thought winning the lottery was the most practical way to accumulate several hundred thousand dollars. Among survey respondents who were 55 years old and older, 31 percent thought the lottery was the most practical way to accumulate the funds.

In the more recent Stash survey, 22 percent of all those surveyed said they plan to work a part-time job in their retirement, while 4 percent plan to move to another country to find a cheaper lifestyle. Another 4 percent plan to depend on their children, and 3 percent said they’re going to get a rich spouse to support them.

Financial experts say a much better plan involves starting early with a small amount and saving over time. The Motley Fool calculated that with a mix of stocks and other investments that yield an average annual 7 percent return, someone who saves just $100 a month would have $240,000 after 40 years. If that same person saved $500 a month, he or she would have $1.2 million after 40 years.

It’s not quite lottery jackpot money. But it’s an actual, legitimately achievable plan.


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Last Modified: November 21, 2022

10 Cited Research Articles

Annuity.org writers adhere to strict sourcing guidelines and use only credible sources of information, including authoritative financial publications, academic organizations, peer-reviewed journals, highly regarded nonprofit organizations, government reports, court records and interviews with qualified experts. You can read more about our commitment to accuracy, fairness and transparency in our editorial guidelines.

  1. Backman, M. (2019, April 18). The Ridiculous Retirement Solution Nearly 60% of Millennials Are Banking On. Retrieved from https://www.fool.com/retirement/2019/04/18/the-ridiculous-retirement-solution-nearly-60-of-mi.aspx
  2. Consumer Federation of America. (2006, January 9). How Americans View Personal Wealth v. How Financial Planners View This Wealth. Retrieved from https://consumerfed.org/press_release/how-americans-view-personal-wealth-v-how-financial-planners-view-this-wealth/
  3. HealthCare.gov. (n.d.). Federal Poverty Level (FPL). Retrieved from https://www.healthcare.gov/glossary/federal-poverty-level-fpl/
  4. Mega Millions. (2019, May 29). $2 Million Winners in Virginia and West Virginia; Jackpot to $444 Million! Retrieved from https://www.megamillions.com/News/2019/$2-Million-Winners-in-Virginia-and-West-Virginia;.aspx
  5. National Weather Service. (n.d.). How Dangerous is Lightning. Retrieved from https://www.weather.gov/safety/lightning-odds
  6. Powerball. (2019, April 1). About Powerball. Retrieved from https://www.powerball.com/sites/default/files/2019-04/POWERBALL%20Press%20Kit.pdf
  7. Pry, A. (2019, April 24). 1-in-4 millennial retirement plans are based on winning the lottery. Retrieved from https://finance.yahoo.com/news/why-millennials-would-rather-buy-lottery-tickets-than-invest-in-the-stock-market-203011209.html
  8. Quittner, J. (2019, April 17). Why Saving for Retirement Isn’t Playing the Lottery. Retrieved from https://learn.stash.com/why-saving-for-retirement-isnt-playing-the-lottery
  9. Social Security. (2019, April). Research, Statistics & Policy Analysis. Monthly Statistical Snapshot, March 2019. Retrieved from https://www.ssa.gov/policy/docs/quickfacts/stat_snapshot/
  10. Weller, C. (2019, April 22). People Play The Generational Lottery With Their Retirement Savings Accounts. Retrieved from https://www.forbes.com/sites/christianweller/2019/04/22/people-play-the-generational-lottery-with-their-retirement-savings-accounts/#6af9f8fd11b5