A growing number of Gen Z adults are treating sports betting as an investment strategy, prompting financial experts to warn that gambling winnings do not contribute to future Social Security benefits. More than half of Gen Z respondents (52 percent) reported using investment dollars for sports betting at least once in the past year, according to a Betterment Retail Investor Survey of 1,000 investors that was conducted between March 27 and April 3, 2026. Of that 52 percent, 14 percent said they redirected their investments to sports betting multiple times a month.
When it comes to other generations, the poll found that 31 percent of millennials surveyed have redirected investment dollars towards it at least once in the past year, compared to 10 percent of Gen X and 4 percent of baby boomers. While successful bettors may owe taxes on their winnings, those gains generally do not count toward the earnings history used to calculate Social Security retirement benefits. It’s potentially 30 or 40 years of compounding that never happens.” Experts note that the shift occurs amid an already uncertain retirement landscape for young Americans.
Because Social Security benefits are based largely on a worker's lifetime earnings record, individuals who spend years generating income through activities that do not qualify as covered earnings risk receiving lower retirement checks later in life. Gen Z has embraced online sports betting in record numbers following legalization across the United States. However, the Social Security Administration (SSA) tracks a different category of earnings.
Social Security benefits are based on covered wages from employment and net earnings from self-employment that are subject to payroll taxes. Recreational gambling winnings generally fall into neither category. As a result, a bettor can owe federal income taxes on a large jackpot while receiving no corresponding boost to their Social Security earnings record.
If someone earned $100,000 from sports betting during a single year, none of it would count toward their Social Security retirement benefits later on. However, if they earned a $100,000 salary from a traditional job, the income would be included in Social Security's benefit formula. Because Social Security calculates benefits using a worker's 35 highest years of covered earnings, adding a $100,000 earning year could eventually increase retirement benefits by roughly $36 to $76 per month, depending on the worker's earnings history.
And this sort of benefit hit could be especially felt by Gen Z, experts say. They are dealing with structural unemployment and a high cost of living, which leads them and others to seek fast gains and take on higher risks,” Kevin Thompson, the CEO of 9i Capital Group and the host of the 9innings podcast, told Newsweek. Many already feel Social Security won’t be there for them by the time they retire, so the mentality becomes: Why bother?” There is an important exception to these rules.
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