Production of the United States Pennies is Slated to End
Here is a penny for your thoughts. The U.S. Mint is set to discontinue penny and, possibly, nickel production, with the final order placed the week of May 23, 2025. This decision has sparked discussions about the practicality of keeping these low-denomination coins in circulation as their purchasing power continues to decline. Many people are weighing in on the implications of moving towards a cashless society and how it might impact everyday transactions. It raises questions about what would happen to the value of our remaining coins and the convenience for consumers. What do you think about this potential change? Pun intended.
Cost is a leading factor in discontinuing the production and distribution of these low-denomination coins. An Associated Press article by Wyatte Grantham-Philips on May 23, 2025, outlined the cost of producing and distributing our coin and paper currency. The total cost of a penny to be released into monetary circulation is $0.0369, more than 3 times its value. In 2024, America produced and shipped more than 3.17 billion pennies. The cost to generate the additional pennies needed, $31,700,000, for consumer purchases was $116,973,000.
The production and distribution of a nickel repeats the same story. The total cost of a nickel to be released into monetary circulation is $0.1378, nearly 3 times its value. In 2024, America produced and shipped more than 202 million nickels. The cost to generate the additional nickels needed, $10,100,000, for consumer purchases, was $27,835,600.
For a large segment of the U.S. population, coins have become the forgotten currency. They have dropped to the relegated title of a rainy day fund. Pennies and nickels are often tossed into a piggy bank, mason jar, or larger vessel or lost between the cushions of a couch with the idea that one day, we will round them up and cash them in. On average, each household in the U.S. has nearly $59 in loose change. Based on the decision to cease penny production this week, it may be the best time to move forward in rounding up those coins and reintroducing them into monetary circulation. It is uncertain what the value of a penny and a nickel will be in the future.
Consumers who primarily rely on cash for transactions, particularly those with lower incomes, would likely be impacted the most due to the cessation of penny or nickel production. With the reintroduction of low-denomination coins back into circulation, we are following biblical principles to help those who are less fortunate and mitigate the negative impact the saving of these coins predicatively will have upon them. The loss of low-denomination coins will also impact businesses. Adaptive changes for a company include technology costs to upgrade coding changes to cash registers, revamping rounding practices to pricing to eliminate the need for change (this could also generate inflationary costs that consumers will absorb), and product placement in the stores. It is beneficial to remember the message in Ecclesiastes 5:13-14, which highlights the futility of hoarding, stating that wealth hoarded can be harmful to its owner and may not be passed on to future generations. Let’s round up those coins and cash them in. The $59 on average that every household has in loose coins could then be invested to generate future wealth while preserving the benefits of low-denomination coins for lower-income families.
Michael Wallin, Certified Financial Planner ™. For more information, please see www.panthrex.com.
