How To Fund Your Child’s Retirement For Only Thirty Dollars A Month

By Jonathan Timar

Yes, that’s right. I just said that you can fund your child’s entire retirement for only thirty dollars a month. Notice I did not say that you can fund their education for only thirty dollars a month, I said you can fund their retirement. You are doubting me already, I can feel it.


There is a miracle in this world called compound interest, and the only thing that miracle needs to work is time. If you have time, this miracle can do anything.

“But I don’t want to be paying into a retirement plan for my kid all his life, I love my children, but theirs a limit to what a parent can do!”

Did I say you would have to be paying into a plan for your child’s entire life? No I did not. In fact in order to fund your child’s retirement, you need only spend thirty dollars a month until his/hers nineteenth birthday. After that you don’t need to spend another cent, and neither do they.

“But seriously, how is that even possible?

I already told you. Compound interest is the key, and it’s not only possible, it’s easy!

“But I am already saving money every months for my child’s university education, I can’t really afford any more than that. Isn’t it more important for them to have a good education so they can get a good job. After that, retirement can take care of itself, right?”

Congratulations on planning ahead. And you bring up a valid point, but I am going to offer a radical counterpoint here: It may be better to let your child fund his or her own education, and instead fund their retirement plan. There are a couple of obvious and clichéd reasons why.

  1. They will appreciate it more if they have to work for it.
  2. They will have an opportunity to learn the value of a dollar.

Both of those reasons are valid from a parenting standpoint, but not from a financial standpoint.

    Keep In Touch

    Get the latest posts by email, plus exclusive content, offers, and free stuff just for subscribers.


    So what is a good reason then? Well for starters, an education may be expensive, but it is not so expensive that it can not be paid for in a few years with relative ease. A retirement fund, however, takes most people a lifetime to build. Compound interest is a miracle, but that miracle takes time to work, and therein lies the secret to how you can fund your child’s retirement. It works like this:

    Suppose you start on the day your child is born and put one dollar into an investment fund in their name. This is not a savings account, but a true investment vehicle. For the purposes of this illustration it doesn’t matter what it is invested in specifically, but let’s assume it’s mutual funds or stocks. And let’s say the account averages a ten percent rate of return after taxes. So on day one of your child’s life they have a net worth of one dollar. The next day you put another dollar in, and the next day, and the next and so on. Or you could just put thirty dollars in at the beginning of every month which is probably more sensible. At the end of one year you have three hundred sixty dollars invested. But wait! You are earning ten percent on that, so you actually have three hundred ninety-six dollars saved for your child to retire on. That won’t even cover a cat food diet for a single year, but that’s okay because every month you keep adding your thirty dollars until your child’s nineteenth birthday, when you stop making contributions to the account forever. You have saved:


    “Say what? You expect my child to retire with seventeen thousand dollars in the bank? Are you nuts!? I may as well cash in and use the money to pay for their university!”

    I may be nuts, the doctors are out on that one, but that’s not the subject of this article. Once your child turns nineteen, you stop saving in the account. But you don’t touch it! Just leave it alone (okay don’t leave it alone, monitor the investments like you would any others), and let it grow. And guess what? When your kid turn’s sixty-five they will have nearly:

    1.4 Million Dollars!!!

    Don’t believe me? Do the math yourself: Compound Interest Calculator

    And the best part is it will have cost you less than seven thousand dollars. With that amount of money in the bank, a person could potentially be generating a yearly income of a hundred thousand dollars or more without ever dipping into the principle. Not only would your child’s retirement be grand, but your grandchildren would have a substantial inheritance coming their way.

    Now don’t you wish your parents had saved for your retirement?