Smoking and Financial Health

Jul 11, 2016

Smoking cigarettes will negatively impact your physical health.  This is a widely known fact. Have you considered the financial impact?  A lifetime of smoking can be devastating to your net worth.  If you need a financial incentive to quit smoking --- here it is!

There is a strong connection between wellness and financial security.  While you have little or no control over genetic factors that impact your health, you can do your best to follow a healthy lifestyle.  Smoking is one unhealthy habit that you can control.

Smoking is a costly habit that can lead to cardiovascular disease, stroke, and lung cancer. The costs of cigarettes, increased health care needs, and potential loss of wages will jeopardize your financial well-being. 

Lifetime of Smoking Costs $662,000

In Indiana, 23% of adults smoke on a regular basis.  This exceeds the national average of nearly 17% and ranks Indiana 44th among all states. According to experts, smoking is currently the leading cause of preventable disease and death in the United States, accounting for one out of every five deaths.  

The cost of a pack of cigarettes in Indiana averaged $6.26 in 2015. This means if someone smokes two packs per day, he or she would spend $4,570 per year on cigarettes.  If we assume an 18-year-old begins smoking today and continues to age 65 and that a pack of cigarettes increases by 4% each year, the total outlay over those 47 years would be $661,861. Wow!

Smoker’s Net Worth is 50% Less

Perhaps the most alarming financially-related smoking statistic is this:  the net worth of a smoker is 50% less, on average, than the net worth of a non-smoker.  

To illustrate the impact of smoking on net worth, consider the cost of cigarettes as noted above being almost $662,000 over a smoker’s lifetime.  Instead of purchasing two packs of cigarettes per day, let’s assume the money was invested and earned an average of 6% per year.  At age 65, the non-smoker would have nearly $2,500,000 set aside in their investment portfolio.  You can see the substantial impact that saving versus spending on cigarettes can have on one’s net worth!

What does this mean to someone’s financial security at retirement?  A portfolio of $2.5 million would result in additional retirement spending of about $100,000 per year from age 65 to age 95.  That’s the financial benefit on not smoking!

Other Costs of Smoking

It isn’t simply the cost of cigarettes that reduces the smoker’s financial well-being.  Smokers pay higher premiums on medical coverage as well as life, disability, and long-term care insurance.  Smokers will eventually be higher users of the healthcare system resulting in more out-of-pocket expenses for deductibles and co-pays as well as medications and therapy.  

Another cost is the impact that chronic illness, such as heart disease, lung disease, or diabetes, can have on your career and earning potential. Individuals with chronic illnesses are more likely to work part-time rather than full-time. They are also more likely to work fewer years than a non-smoker.  Working less will result in reduced lifetime earnings, less personal savings, and lower employer contributions to retirement plans.  In addition, lower lifetime wages mean less paid into Social Security and, consequently, a lower benefit amount in retirement.

With these other financial factors in addition to the pure cost of smoking, you can see how one’s net worth and plans for a secure retirement can be significantly hindered.


There is a definite connection between wellness and financial security.  Smoking is just one example of an unhealthy lifestyle that can substantially impact your family’s financial security. Take control of your financial health by making good lifestyle choices.  The full impact of an unhealthy choice is not realized immediately, but over time, deteriorating physical health and the financial consequences become irreversible.

About Us

Recommended Articles

Image for Instant Gratification? Not So Fast

Apr 18, 2024

Instant Gratification? Not So Fast

It’s easy to opt for instant gratification when it comes...

Image for Ask Bedel

Apr 15, 2024

Ask Bedel

Welcome to #AskBedel, a weekly personal-wealth Q&A where...

Image for The Lost Years: The Untold Truth About Your 30s

Jan 22, 2024

The Lost Years: The Untold Truth About Your 30s

What people fail to talk about is how this phase of life...

Image for New Year, New Money Resolutions

Jan 8, 2024

New Year, New Money Resolutions

Nearly half of Americans still feel the wrath of...