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Can You Afford to Play the Lottery?

Not if Powerball comes before your bills

Playing the lottery can provide a thrill, and it's tempting to purchase a ticket or several when, like this week, the Powerball jackpot is a whopping $600 million. 

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But if you're trying to get ready to retire — or simply trying to make ends meet on a limited budget — you need to think hard about devoting precious financial resources to long-shot jackpot hopes.

Nearly one-half of boomers in the United States between the ages of 56 and 62 are at risk of not having enough income in retirement to pay for basic necessities and uninsured health costs, much less Powerball and Mega Millions tickets. And the likelihood of winning the grand prize in a state lottery can be as astronomical as 1 in 175 million, depending on the game, according to state lottery commissions.

Yet despite the poor odds, about 50 percent of people over 50 report some form of gambling including playing the lottery, according to Keith Whyte, executive director of the National Council on Problem Gambling.

When Gallup conducted a poll a few years back, it found that two out of three Americans had gambled during the previous 12 months. The most popular form of gambling was the state lottery: 49 percent of those polled had bought tickets. The age group with the highest rate of gambling (69 percent) was 50- to 64-year-olds. Sixty-one percent of the people polled who were 65 and up had gambled in some form during the prior year.

Spending a dollar a week to play your lucky numbers won't break the bank; just don't count on winnings to fund your retirement. The keys are playing the lottery for fun and spending within your means.

"You need to know how to gamble responsibly," says Whyte, "which means knowing the odds, being able to set a limit of time and money, and being able to stick to it."

Here are three lottery rules to live by:

1. Play for fun

Truth be told, most people who play the lottery are hoping to win big. Maybe the dream is to buy a new home, put the grandkids through college, or simply quit work and live the good life. In reality, almost no one hits the jackpot. Assume you won't either.

"The fact is the chance of winning millions in any state lottery is almost as good if you have a ticket or don't have a ticket, " says Arnie Wexler, co-founder of Arnie & Sheila Wexler Associates, which provides counseling for gambling problems.

If you play the lottery, play it for entertainment only, says Wexler. Don't play to get out of debt or provide for your future. The lottery is no substitute for a steady job and solid retirement planning.

Next: Set limits — and stick to them. »

2. Set limits — and stick to them

Even if you have plenty of disposable income to throw at lottery tickets, set a limit on the amount you'll spend. Decide how much money you're willing to lose ahead of time and stick to that budget no matter what. Never spend more to try to recoup losses.

Don't just limit how much you spend on lottery tickets but also how often you play. Just because you go to the supermarket three times a week doesn't mean you should play the lottery each time you go. Nor should you spend hours on end picking numbers.

Figure out how much time and money you can reasonably devote to the lottery. How many times a week, month or year do you want to play? How much? As with any budget, when you reach your limit, stop — even if you have money burning a hole in your pocket.

3. Guard against a gambling addiction

Lottery tickets, at a buck apiece, don't seem like a financial burden. But if you buy lottery tickets every time you hit the pharmacy or stop for gas, those dollars can start adding up fast. Make sure you only spend what you can truly afford to lose.

Are you dipping into savings to buy scratchers? How about diverting funds set aside for monthly expenses such as groceries and utility bills to Powerball purchases?

You should treat lottery tickets like any other form of entertainment. You sock away money for dinner out or an evening at the movies, right? Do the same with playing the lottery.

"If you're not addicted, then there will be no problem," says Wexler. "If you're addicted to it, you'll spend more than you intended to or want to."

Talk to a trusted friend, family member or health care professional if you're concerned about gambling addiction, or contact an organization such as Gamblers Anonymous.

You may also like: Lost lottery ticket? Here's what to do.

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