Millionaire by 65: This Deposit at Birth Ensures Your Child Retires With Seven Figures

Father looking at baby boy playing with pen.
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Retirement may not come easy for future generations. With talk of Social Security being depleted by 2035 and more people retiring later in life than they did 30 years ago (76% of Americans aged 65-69 are still working, per Yahoo), a robust, healthy retirement may be out of reach for kids today.

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Yet, there is one way you can ensure your children retire millionaires — if you have some extra cash around when they are born. By depositing $7,000 the day they are born, they will have $1 million by the time they are 65.

This tip comes courtesy of Chloé Daniels of Quick Money Tips (also host of “The Money Bare” podcast). She explained the math in a Jan. 15 Instagram post, showcasing how compound interest helps grow the initial $7,000 investment into seven figures.

Assuming there is an 8% average return after investing in an S&P 500 index fund, the money will be allowed to grow to this level over time. The chart below shows how it works:

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Source: Instagram / Chloé Daniels

If you don’t have $7,000 available, another option Daniels provided is to invest $3,000 initially, deposit $200 a month for 20 years and then let your child take over their own contributions from the ages of 20-45. By 45, they’ll have $1 million (and it’ll teach your kids the importance of investing from a young age).

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Or, if all you are able to to invest is $100 a month from the day they are born until they are 55 years old, they could still retire as millionaires with a total $66,000 contribution from you, according to Daniels.

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About the Author

Selena Fragassi joined in 2022, adding to her 15 years in journalism with bylines in Spin, Paste, Nylon, Popmatters, The A.V. Club, Loudwire, Chicago Sun-Times, Chicago Tribune, Chicago Magazine and others. She currently resides in Chicago with her rescue pets and is working on a debut historical fiction novel about WWII. She holds a degree in fiction writing from Columbia College Chicago.
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