Many people are gambling with their retirement, not saving enough and hoping that things will work out. But some credit unions and nonprofits are taking a different approach to induce savings: lottery tickets.
As The New York Times reports, so-called “Prize-Linked Savings Accounts” are popping up around the country that give customers lottery tickets with every deposit. Before you scoff at the idea, there’s a bill in Congress that has bipartisan support, with liberals and conservatives agreeing that tying lottery tickets to savings is a good idea.
Does this unorthodox approach increase savings? “Save to Win,” a Massachusetts-based nonprofit, has gathered 50,000 accounts with $94 million; similar incentives are now offered in 20 countries. And a study by the conservative Heritage Foundation praises financial tools that have emotional appeal. In fact, one winner says she is now “addicted to savings” after winning $100. Could be worse.
