Investing Tooth Fairy Money Could Payoff in Retirement

Posted on August 27, 2015

OAKBROOK, Ill., Aug. 26, 2015 /PRNewswire-USNewswire/ -- It'll take a little discipline and a lot of patience, but it turns out a good source for retirement income for today's kids may be right under their pillow. According to a new analysis out today from Delta Dental Plans Association, if today's 6 year olds invest all the money they receive from the Tooth Fairy, they could be sitting on a combined total of roughly $70 billion by the time they reach 67, the traditional retirement age.

That could mean a whopping $21,000 per child when current 6 year olds in the United States hit retirement age, if, that is, they invest all their Tooth Fairy earnings. Delta Dental's 2015 The Original Tooth Fairy Poll® found the Tooth Fairy visited 81% of homes in the United States, meaning out of the current 4.1 million 6 years olds about 3.35 million received gifts.

The retirement income figure is based on a 6 year old (average age for 1st tooth loss) receiving the national average Tooth Fairy gift of$4.36 (from Delta Dental's most recent survey of U.S. parents of 6-12 year olds), with 6.5% in-mouth inflation (the typical increase for Tooth Fairy gifts from year to year) for each subsequent tooth, and a 9.6% return on investment based on historic stock market returns (S&P 500 average) per year until they turn 67.

By region, the retirement savings will vary in line with the average 2014 Tooth Fairy gift:

  • Northeast: $20,477 (average 2014 Tooth Fairy gift of $4.16)

  • Midwest: $13,910 (average 2014 Tooth Fairy gift of $2.83)

  • South: $25,362 (average 2014 Tooth Fairy gift of $5.16)

  • West: $23,004 (average 2014 Tooth Fairy gift of $4.68)

According to Delta Dental's The Original Tooth Fairy Poll®, the average Tooth Fairy gift reached a record high last year, up 24.6% from 2013 when the average gift was $3.50

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