February 2005
Contributions for a Child Simulation:
A child born today could receive a substantial supplemental retirement income if the parents were to make contributions from birth. The following simulation models such a scenario.
| Age: 1 | Contributions: $1,000.00 | Accrued Interest: $17.00 | Balance: $1,017.00 |
| Age: 2 | Contributions: $2,000.00 | Accrued Interest: $80.55 | Balance: $2,080.55 |
| Age: 3 | Contributions: $3,000.00 | Accrued Interest: $192.77 | Balance: $3,192.77 |
| Age: 4 | Contributions: $4,000.00 | Accrued Interest: $355.88 | Balance: $4,355.88 |
| Age: 5 | Contributions: $5,000.00 | Accrued Interest: $572.23 | Balance: $5,572.23 |
| Age: 6 | Contributions: $6,000.00 | Accrued Interest: $844.25 | Balance: $6,844.25 |
| Age: 7 | Contributions: $7,000.00 | Accrued Interest: $1,174.48 | Balance: $8,174.48 |
| Age: 8 | Contributions: $8,000.00 | Accrued Interest: $1,565.59 | Balance: $9,565.59 |
| Age: 9 | Contributions: $9,000.00 | Accrued Interest: $2,020.36 | Balance: $11,020.36 |
| Age: 10 | Contributions: $10,000.00 | Accrued Interest: $2,541.71 | Balance: $12,541.71 |
| Age: 11 | Contributions: $11,000.00 | Accrued Interest: $3,132.68 | Balance: $14,132.68 |
| Age: 12 | Contributions: $12,000.00 | Accrued Interest: $3,796.47 | Balance: $15,796.47 |
| Age: 13 | Contributions: $13,000.00 | Accrued Interest: $4,536.40 | Balance: $17,536.40 |
| Age: 14 | Contributions: $14,000.00 | Accrued Interest: $5,355.95 | Balance: $19,355.95 |
| Age: 15 | Contributions: $15,000.00 | Accrued Interest: $6,258.78 | Balance: $21,258.78 |
| Age: 16 | Contributions: $16,000.00 | Accrued Interest: $7,248.69 | Balance: $23,248.69 |
| Age: 17 | Contributions: $17,000.00 | Accrued Interest: $8,329.67 | Balance: $25,329.67 |
| Age: 18 | Contributions: $18,000.00 | Accrued Interest: $9,505.89 | Balance: $27,505.89 |
| Age: 19 | Contributions: $19,000.00 | Accrued Interest: $10,781.70 | Balance: $29,781.70 |
| Age: 20 | Contributions: $20,000.00 | Accrued Interest: $12,161.67 | Balance: $32,161.67 |
| Age: 21 | Contributions: $21,000.00 | Accrued Interest: $13,650.55 | Balance: $34,650.55 |
| Age: 22 | Contributions: $22,000.00 | Accrued Interest: $15,253.34 | Balance: $37,253.34 |
| Age: 23 | Contributions: $23,000.00 | Accrued Interest: $16,975.24 | Balance: $39,975.24 |
| Age: 24 | Contributions: $24,000.00 | Accrued Interest: $18,821.71 | Balance: $42,821.71 |
| Age: 25 | Contributions: $25,000.00 | Accrued Interest: $20,798.45 | Balance: $45,798.45 |
| Age: 26 | Contributions: $26,000.00 | Accrued Interest: $22,911.43 | Balance: $48,911.43 |
| Age: 27 | Contributions: $27,000.00 | Accrued Interest: $25,166.86 | Balance: $52,166.86 |
| Age: 28 | Contributions: $28,000.00 | Accrued Interest: $27,571.29 | Balance: $55,571.29 |
| Age: 29 | Contributions: $29,000.00 | Accrued Interest: $30,131.51 | Balance: $59,131.51 |
| Age: 30 | Contributions: $30,000.00 | Accrued Interest: $32,854.67 | Balance: $62,854.67 |
| Age: 31 | Contributions: $31,000.00 | Accrued Interest: $35,748.23 | Balance: $66,748.23 |
| Age: 32 | Contributions: $32,000.00 | Accrued Interest: $38,819.97 | Balance: $70,819.97 |
| Age: 33 | Contributions: $33,000.00 | Accrued Interest: $42,078.05 | Balance: $75,078.05 |
| Age: 34 | Contributions: $34,000.00 | Accrued Interest: $45,531.01 | Balance: $79,531.01 |
| Age: 35 | Contributions: $35,000.00 | Accrued Interest: $49,187.75 | Balance: $84,187.75 |
| Age: 36 | Contributions: $36,000.00 | Accrued Interest: $53,057.61 | Balance: $89,057.61 |
| Age: 37 | Contributions: $37,000.00 | Accrued Interest: $57,150.34 | Balance: $94,150.34 |
| Age: 38 | Contributions: $38,000.00 | Accrued Interest: $61,476.14 | Balance: $99,476.14 |
| Age: 39 | Contributions: $39,000.00 | Accrued Interest: $66,045.68 | Balance: $105,045.68 |
| Age: 40 | Contributions: $40,000.00 | Accrued Interest: $70,870.11 | Balance: $110,870.11 |
| Age: 41 | Contributions: $41,000.00 | Accrued Interest: $75,961.09 | Balance: $116,961.09 |
| Age: 42 | Contributions: $42,000.00 | Accrued Interest: $81,330.83 | Balance: $123,330.83 |
| Age: 43 | Contributions: $43,000.00 | Accrued Interest: $86,992.07 | Balance: $129,992.07 |
| Age: 44 | Contributions: $44,000.00 | Accrued Interest: $92,958.17 | Balance: $136,958.17 |
| Age: 45 | Contributions: $45,000.00 | Accrued Interest: $99,243.08 | Balance: $144,243.08 |
| Age: 46 | Contributions: $46,000.00 | Accrued Interest: $105,861.38 | Balance: $151,861.38 |
| Age: 47 | Contributions: $47,000.00 | Accrued Interest: $112,828.33 | Balance: $159,828.33 |
| Age: 48 | Contributions: $48,000.00 | Accrued Interest: $120,159.89 | Balance: $168,159.89 |
| Age: 49 | Contributions: $49,000.00 | Accrued Interest: $127,872.74 | Balance: $176,872.74 |
| Age: 50 | Contributions: $50,000.00 | Accrued Interest: $135,984.34 | Balance: $185,984.34 |
| Age: 51 | Contributions: $50,000.00 | Accrued Interest: $144,495.57 | Balance: $194,495.57 |
| Age: 52 | Contributions: $50,000.00 | Accrued Interest: $153,396.68 | Balance: $203,396.68 |
| Age: 53 | Contributions: $50,000.00 | Accrued Interest: $162,705.15 | Balance: $212,705.15 |
| Age: 54 | Contributions: $50,000.00 | Accrued Interest: $172,439.62 | Balance: $222,439.62 |
| Age: 55 | Contributions: $50,000.00 | Accrued Interest: $182,619.58 | Balance: $232,619.58 |
| Age: 56 | Contributions: $50,000.00 | Accrued Interest: $193,265.44 | Balance: $243,265.44 |
| Age: 57 | Contributions: $50,000.00 | Accrued Interest: $204,398.50 | Balance: $254,398.50 |
| Age: 58 | Contributions: $50,000.00 | Accrued Interest: $216,041.07 | Balance: $266,041.07 |
| Age: 59 | Contributions: $50,000.00 | Accrued Interest: $228,216.47 | Balance: $278,216.47 |
| Age: 60 | Contributions: $50,000.00 | Accrued Interest: $240,949.07 | Balance: $290,949.07 |
| Age: 61 | Contributions: $50,000.00 | Accrued Interest: $254,264.38 | Balance: $304,264.38 |
| Age: 62 | Contributions: $50,000.00 | Accrued Interest: $268,189.06 | Balance: $318,189.06 |
| Age: 63 | Contributions: $50,000.00 | Accrued Interest: $282,751.01 | Balance: $332,751.01 |
| Age: 64 | Contributions: $50,000.00 | Accrued Interest: $297,979.39 | Balance: $347,979.39 |
| Age: 65 | Contributions: $50,000.00 | Accrued Interest: $313,904.70 | Balance: $363,904.70 |
An account with a balance of $363,904.70 will yield $16,375.71 per year or $1,364.64 per month in interest payments. This would provide over 19 years of tax-free income before dipping into contributions.
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