Can the Tooth Fairy provide retirement income?

August 25, 2015

According to a new analysis from Delta Dental Plans Association, if today's 6-year-olds invest the money they receive from the tooth fairy, they could have a combined total of roughly $70 billion by the time they reach 67, the traditional retirement age.

A new analysis found under-the-pillow income could yield billions in retirement money for today's 6-year-olds.

A good source of retirement income for today's kids may be right under their pillow.

According to a new analysis from Delta Dental Plans Association, if today's 6-year-olds invest the money they receive from the tooth fairy, they could have a combined total of roughly $70 billion by the time they reach 67, the traditional retirement age.

That could mean $21,000 per child.

Delta Dental's 2015 The Original Tooth Fairy Poll® found the Tooth Fairy visited 81 percent of homes in the United States, meaning out of the current 4.1 million 6-year-old,s about 3.35 million received gifts.

More on the Tooth Fairy: Tooth Fairy pays record $255 million for lost teeth in 2014

The retirement income figure is based on a 6-year-old (the average age for first 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- to 12-year-olds) with 6.5 percent inflation (the typical increase for Tooth Fairy gifts from year to year) for each subsequent tooth and a 9.6 percent 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 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 the Delta Dental poll, the average Tooth Fairy gift reached a record high last year, up 24.6 percent from 2013 when the average gift was $3.50.

Related reading: How much money is the Tooth Fairy giving kids for a lost tooth?