Info Graphs

Taxable vs Tax-deferred Investing Over an 18-year Timeframe

$2,500 initial contribution and $100 monthly contribution for 18 years.

Taxable Account (taxed annually) Tax-Deferred Account*(after taxes)
$41,126 with initial contribution of $2,500 $50,677 with initial contribution of $2,500. This is $9,551 more than a Taxable Account

*529 funds may be tax-free if used for qualified higher education expenses. Please consult your tax advisor.back

The above table is for illustration purposes only. The chart is based on a $2,500 initial contribution and $100 monthly contribution for 18 years. The tax-deferred numbers reflect a 7% earnings rate and no taxes deducted. The taxable numbers reflect a 7% earnings rate less an assumed 22% federal tax rate and 4.95% State of Illinois rate.

Assumed Annual Return at 5%*
Monthly Amount 5 Year Invested 10 Year Invested 15 Year Invested 18 Year Invested
$50 $6,623 $11,914 $18,704 $23,670
$100 $10,037 $19,710 $32,125 $41,203
$250 $20,281 $43,100 $72,385 $93,802
$500 $37,353 $82,082 $139,486 $181,466

*This hypothetical example illustrates the accumulation potential with a $2,500 initial investment and a monthly contribution plan at 5% projected average annual return. The above example is based on projections and does not reflect your actual investment in the Bright Start Direct-Sold College Savings Program. If fees were included, the returns would be lower. Your actual results may be more or less.back

Average Weekly Earnings
High School Graduate Some College or Associate Degree Bachelor’s Degree Advanced Degree
$768 $880 $1,263 $1,604

Source: Bureau of Labor Statistics, U.S. Department of Labor, News Release (1st Quarter 2020 Averages – April 15, 2020)