This week’s Star Tribune contained the good news that Minnesota ranks third highest in the nation for our savings rate. That’s an interesting story, but this would be an enlightening sidebar angle for someone: Is government-financed lottery advertising preventing us from being much better savers?
At first blush, lottery advertising and 401Ks may seem like completely unrelated issues. But consider this: A Primerica survey found that almost half of Americans earning $15,000 to $25,000 per year believe that they will secure their retirement nest egg by winning the lottery. The same is true with about 40% of people earning between $25,000 and $35,000 annually, and 27% of all Americans.
Where are people getting this silly idea? After all, mathematicians tell us that our odds of dying while we read this (or doing other things of a similar duration!) are better than our odds of winning the Powerball.
Well, one of the most persistent, well-funded and effective hucksters of the lottery get-rich-quick illusion is…us. Taxpayers pay millions of dollars per year to spotlight the rare winners of lotteries and downplay the losers.
At the same time, taxpayers don’t spend a penny to spotlight a much more certain path to having a $500,000 nest egg at retirement — putting $100 per month in a 401(k).