Understanding the economic impact of the penny retiring.

After more than 230 years, the U.S. government has stopped making pennies. This change will affect how you pay for things with cash. You might need to adjust your payment methods or budget accordingly.

Here’s what you need to know about the penny retirement and how it’s expected to change things in the U.S.

What does it mean for the penny to retire?

The phrase “the penny is retiring” means the U.S. Mint has stopped making new pennies. The discontinuation of the penny doesn’t mean your old pennies become worthless. You can still use them to pay for purchases. But as pennies get lost or damaged, no new ones will replace them.

The government ordered the last penny materials in May 2025, and the final pennies were minted on November 12. There are about 114 billion pennies link opens in a new window being used across America, roughly 700 pennies for every person.

The history of the penny

The penny was one of the first coins link opens in a new window made after the U.S. Mint was founded in 1792. Originally, it showed a woman with flowing hair meant to represent freedom. The biggest change happened in 1909 when Abraham Lincoln’s face was added, making the penny the first U.S. coin to feature the image of a real person.

Today, Abraham Lincoln is on the front with the Lincoln Memorial on the back.

The cost to make a penny

The main reason for the end of the penny is simple economics. It costs 3.7 cents to make each penny which is almost four times what the penny is worth. The elimination of new penny production is expected to  result in an immediate annual savings of $56 million link opens in a new window.

Another reason is that Americans use cash less often. About 41% of Americans link opens in a new window don't use cash at all in a normal week, compared to only 29% in 2018. Most people now use cards or phone apps to pay instead of cash.

How other countries handled small coin elimination

The U.S. isn’t the first country to stop making its smallest coin. Canada link opens in a new window stopped making pennies in 2012, Australia link opens in a new window eliminated 1-cent and 2-cent coins in 1992, and New Zealand link opens in a new window discontinued its smallest coins between 1990 and 2006. These countries successfully implemented rounding for cash payments while keeping exact prices for electronic payments.

How rounding will work when you pay cash

Phasing out new penny production means new rules for cash link opens in a new window payments. The Common Cents Act is a bipartisan bill that proposes modernizing U.S. coinage by eliminating the penny and rounding cash transactions to the nearest five cents. This proposed bill has not been enacted into law yet, but Commerce Bank is taking proactive measures due to the shortage of pennies.
 

Sales tax complicates this process since tax calculations often create cent amounts. Local governments may provide additional guidance on handling these situations.

What to do with your pennies now

Your pennies are still legal tender. Here are your options:

• Use them for purchases. Spend your pennies while stores still accept them.
• Take them to the bank. Most banks will exchange pennies for other money, though some require rolled coins. Commerce Bank doesn’t require coin to be rolled, and many branches have a coin machine to verify the amount of coin.
• Check for valuable copper pennies. Pennies made before 1982 contain 95% copper and might be worth more than face value.
• Keep some as keepsakes. Save a few pennies to remember this historic change.

The end of the penny represents a practical step toward a more efficient monetary system that matches how people actually conduct transactions today. Understanding the economic impact of the penny’s retirement helps you prepare for this significant change in American currency.