Retirement Balance Based on 4% Withdrawal Per Year

Chart of the Week for February 9-15, 2007

Retirement is supposed to be a time when a person no longer has to burden themselves with financial worries and can relax while enjoying the finer things in life.

Today, retirement is becoming more complicated for a variety of reasons and it is important to understand how an individual should properly manage their money once they retire. If an individual retired with $100,000 in their account 30 years ago, we can see in the graph above what their balance would be today, assuming the account earned the return of one of the three indexes listed above. In addition, the graph factors in inflation and assumes the individual withdraws 4% of their balance at the end of each year.

If an individual’s retirement account earned the same return as the 30 Day U.S. Treasury Bill, the account’s balance would have dropped to less than $50,000 by 2006. If the same account earned the return of the Lehman Brothers Aggregate Bond Index, the final balance would be just below $95,000. And finally, if the individual’s account followed the performance of a blended stock and bond index (50% Lehman Brothers Aggregate Bond and 50% S&P 500 Index), the account would be worth almost $180,000 today.

Investors should remember that even during retirement it is still important to keep a long-term focus in order to stay ahead of inflation and withdrawals.

This illustration was compiled by information from outside sources. These companies are not affiliated with ICMA-RC. This information is being provided for educational purposes and is not intended to be construed as or relied upon as investment advice. ICMA-RC does not offer specific tax or legal advice. Individuals are advised to consider any new investment strategies carefully prior to implementing.

Investment information can change rapidly and the changes can be significant particularly in volatile markets. For this reason “as of”’ dates are provided for specific data where applicable. The information should not be considered current after the dates provided.

Please read both the current applicable prospectus and MAKING SOUND INVESTMENT DECISIONS: A Retirement Investment Guide carefully for a complete summary of all fees, expenses, charges, financial highlights, investment objectives, risks and performance information. Investing in mutual funds and other investment vehicles involves risk, including possible loss of the amount invested. Investors should carefully consider the Fund's investment objectives, risks, charges and expenses before investing or sending money. The prospectus contains this and other information about the investment company. The Vantagepoint Funds are distributed by ICMA-RC Services LLC, a wholly owned broker-dealer subsidiary of ICMA-RC and member FINRA/SIPC. For a current prospectus, contact ICMA-RC Services, LLC.

The performance data quoted represents past performance. Past performance is no guarantee of future results. Investment returns and principal value will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data illustrated. For performance data current to the most recent month end, contact ICMA-RC Services, LLC by calling 800-669-7400 or by writing to 777 North Capitol Street, NE, Washington, DC 20002-4240. Para asistencia en Español llame al 800-669-8216. Performance data current to the most recent quarter end is available by visiting www.icmarc.org.