The Death of the Penny – US Mint to Cease Penny Production in 2023

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The US Mint announced they will end production of the US Penny starting in 2023, citing the high cost of production and the penny 's decreasing value.

shocked-lincolnThe US Mint announced this morning that they will phase out the production of new pennies beginning in late 2022, and mint the last batch of pennies on April 1, 2023.

The final batch of pennies will be released in proof sets which will be auctioned off to coin collectors with the proceeds going toward our national debt.

The last run will be limited to 50,000 proof sets, and opening bidding is expected to start at $179.99, which is affordable, considering you will own a piece of US numismatic history.

High Cost of Making New Pennies to Blame

The announcement follows years of speculation regarding when the US would stop minting pennies, as it actually costs more than 1 cent to produce a penny.

On average, pennies cost just over 2 cents to make, making penny production a losing proposition, especially when the US Mint produces billions of pennies annually. According to GovTrackInsdier.com’s analysis of the U.S. Mint’s annual report (the most recent report available), “taxpayers lost about $85.4 million from penny production and $33.5 million from nickel production last year.”

Add the fact that “a penny just doesn’t buy what it used to,” and it’s clear the US Government is making the right decision by eliminating the penny.

There is no indication at this time that the U.S. Mint will stop producing nickels. It will likely take several years of living without pennies before we fully understand the impact of removing coins from circulation.

What Will Happen to All the Pennies?

Pennies will remain legal tender, but you will be hard-pressed to find stores willing to accept them after April 1, 2023, for two reasons.

The first and most obvious reason stores will stop providing pennies as change is because the US Mint will impose additional handling fees for purchasing or processing rolls of pennies.

Finally, the US Mint will institute a penny buyback incentive.

Starting in late 2022, the US Government will begin “Pennies for Freedom,” a penny reclamation campaign designed to collect the estimated 23 trillion unused pennies sitting in people’s homes and coin jars.

The pennies will then be melted and the copper will be used for green energy projects throughout the US. This is part of the Biden Administration’s plans for reducing US dependence on foreign energy.

How Will Stores Handle Transactions Without Pennies?

We are moving toward a cashless society and most transactions are handled electronically with credit cards, ATM cards, peer to peer purchasing systems such as Venmo or Zelle, or even with an old-fashioned check. The emergence of Bitcoin, Etherium, and other cryptocurrencies has also been cited as a growing reason for the decline of the penny. So eliminating the penny won’t actually affect most people.

For people who insist on paying cash, the US Mint recommends that stores round up or down to the nearest nickel.

Note: As a side effect, expect state and local sales taxes to increase to round up to the nearest nickel as well to make accounting easier for stores and cashiers.

Eliminating the Penny Benefits Everyone!

No more pennies means we all win! It is estimated the average person loses $38.92 in pennies throughout their lifetime. Change will be easier to count and manage, and purses will be lighter. No more looking under car seats, under couch cushions, sifting through the coin jar, etc.

I’m looking forward to it already!

Penny Fun Facts:

$$$ And if you haven’t figured it out by now – Happy April Fools Day! 🙂

oh-noDisclaimer: No pennies were harmed in the writing of this blog article. All facts, figures, and other information were made up on the spot or carefully edited for effect, except for the Penny Fun Facts, which lead to legitimate sources of information.

penny photo credit: Nbauer.

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About Ryan Guina

Ryan Guina is the founder and editor of Cash Money Life. He is a writer, small business owner, and entrepreneur. He served over 6 years on active duty in the USAF and is a current member of the IL Air National Guard.

Ryan started Cash Money Life in 2007 after separating from active duty military service and has been writing about financial, small business, and military benefits topics since then. He also writes about military money topics and military and veterans benefits at The Military Wallet.

Ryan uses Personal Capital to track and manage his finances. Personal Capital is a free software program that allows him to track his net worth, balance his investment portfolio, track his income and expenses, and much more. You can open a free account here.

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  1. Bobby Joe Tollerson says

    I don’t care if it cost 5 cents to make a penny. It only costs that once. How many trillions of dollars a year does it take to finance those fat rats in Washington? Taking away the penny is killing an American icon.

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