| Table 2 |
| INCOME INSURANCE |
| Social Security IRA (% of OASI) | 25.0% | Invested in Stock Fund (% of OASI) | 25.0% |
| Invested in Bond Fund (% of OASI) | 25.0% | Survivor's Insurance Premium | 10.0% |
| Income Insurance Premium (10%/5%) | 15.0% | Minimum Retirement Income | $18,000 |
| Bond Fund Rate of Return | 5.0% | Stock Fund RoR, Investment Period | 7.0% |
| Earning and Investment Period |
| | | Gp 1 | Gp 2 | Gp 3 | Gp 4 | Gp 5 | Insurance Fund |
| 1a | First Year Earnings | $12,500 | $12,500 | $15,000 | $20,000 | $25,000 | |
| b | Annual Increase | $0 | $400 | $1,200 | $2,000 | $2,500 | |
| c | Fortieth Year Earnings | $12,500 | $28,100 | $61,800 | $98,000 | $122,500 | |
| 2a | First Year FICA (OASDI) | $1,550 | $1,550 | $1,860 | $2,480 | $3,100 | |
| b | Disability Insurance (DI) | $225 | $225 | $270 | $360 | $450 | |
| c | Retirement/Survivor Ins (OASI) | $1,325 | $1,325 | $1,590 | $2,120 | $2,650 | |
| d | Individual Investment | $331 | $331 | $398 | $530 | $663 | |
| e | Invested in Stock Fund | $331 | $331 | $398 | $530 | $663 | |
| f | Income Insurance Premium | $199 | $199 | $239 | $318 | $398 | $1,352 |
| g | Invested in Bond Fund | $331 | $331 | $398 | $530 | $663 | |
| h | Survivor Insurance Premium | $133 | $133 | $159 | $212 | $265 | |
| 3a | Fortieth Year FICA (OASDI) | $1,550 | $3,484 | $7,663 | $10,528 | $10,528 | |
| b | Disability Insurance | $225 | $506 | $1,112 | $1,528 | $1,528 | |
| c | Retirement/Survivor Ins (OASI) | $1,325 | $2,979 | $6,551 | $8,999 | $8,999 | |
| d | Individual Investment | $331 | $745 | $1,638 | $2,250 | $2,250 | |
| e | Invested in Stock Fund | $331 | $871 | $1,638 | $2,250 | $2,250 | |
| f | Income Insurance Premium | $199 | $523 | $983 | $1,350 | $1,350 | $4,404 |
| g | Invested in Bond Fund | $331 | $745 | $1,638 | $2,250 | $2,250 | |
| h | Survivor Insurance Premium | $133 | $298 | $655 | $900 | $900 | |
| 4 | Value of Investments after 40 years | $106,144 | $161,994 | $251,281 | $373,392 | $448,897 | |
| a | Bond Fund | $40,015 | $57,144 | $99,407 | $148,224 | $176,881 | $318,598 |
| b | Stock Fund | $66,129 | $104,850 | $151,875 | $225,169 | $272,016 | |
| c | Income Maintenance Insurance Fund | | | | | | $51,440 |
| Calculation of Retirement Benefits |
| Bond Fund Annuity Value @ 2% | $2,447 | $3,495 | $6,079 | $9,065 | $10,817 | $16,339 |
| Stock Fund Annuity Value @ 5% | $5,306 | $8,413 | $12,187 | $18,068 | $21,827 | |
| Total | $7,754 | $11,908 | $18,266 | $27,133 | $32,645 | |
| Income Insurance Paid | $10,246 | $6,092 | $0 | $0 | $0 | $16,338 |
| Dividend | $0 | $0 | $0 | $0 | $0 | $0 |
| Initial Retirement Benefit | $18,000 | $18,000 | $18,266 | $27,133 | $32,645 | |
| Percent Preretirement Income | $1 | $1 | $0 | $0 | $0 | |
| Retirement Income |
| Year | Insured Minimum | Yearly Stock Fund Returns | Gp 1 | Gp 2 | Gp 3 | Gp 4 | Gp 5 | Insurance |
| 1 | $18,000 | | $18,000 | $18,000 | $18,266 | $27,133 | $32,645 | $51,440 |
| 2 | $18,540 | 7.0% | $18,540 | $18,540 | $18,677 | $27,744 | $33,379 | $54,012 |
| 3 | $19,096 | 7.0% | $19,096 | $19,096 | $19,098 | $28,369 | $34,130 | $56,549 |
| 4 | $19,669 | 7.0% | $19,669 | $19,669 | $19,669 | $29,009 | $34,899 | $59,042 |
| 5 | $20,259 | 7.0% | $20,259 | $20,259 | $20,259 | $29,664 | $35,686 | $61,339 |
| 6 | $20,867 | 7.0% | $20,867 | $20,867 | $20,867 | $30,335 | $36,492 | $63,412 |
| 7 | $21,493 | 7.0% | $21,493 | $21,493 | $21,493 | $31,021 | $37,316 | $65,234 |
| 8 | $22,138 | 7.0% | $22,138 | $22,138 | $22,138 | $31,724 | $38,160 | $66,777 |
| 9 | $22,802 | 7.0% | $22,802 | $22,802 | $22,802 | $32,443 | $39,025 | $68,007 |
| 10 | $23,486 | 7.0% | $23,486 | $23,486 | $23,486 | $33,179 | $39,909 | $68,891 |
| 11 | $24,190 | 7.0% | $24,190 | $24,190 | $24,190 | $33,933 | $40,815 | $69,392 |
| 12 | $24,916 | 7.0% | $24,916 | $24,916 | $24,916 | $34,705 | $41,742 | $69,473 |
| 13 | $25,664 | 7.0% | $25,664 | $25,664 | $25,664 | $35,496 | $42,692 | $69,091 |
| 14 | $26,434 | 7.0% | $26,434 | $26,434 | $26,434 | $36,305 | $43,664 | $68,202 |
| 15 | $27,227 | 7.0% | $27,227 | $27,227 | $27,227 | $37,133 | $44,659 | $66,759 |
| 16 | $28,043 | 7.0% | $28,043 | $28,043 | $28,043 | $37,981 | $45,678 | $64,711 |
| 17 | $28,885 | 7.0% | $28,885 | $28,885 | $28,885 | $38,850 | $46,721 | $62,005 |
| 18 | $29,751 | 7.0% | $29,751 | $29,751 | $29,751 | $39,739 | $47,789 | $58,582 |
| 19 | $30,644 | 7.0% | $30,644 | $30,644 | $30,644 | $40,650 | $48,883 | $54,383 |
| 20 | $31,563 | 7.0% | $31,563 | $31,563 | $31,563 | $41,583 | $50,003 | $49,342 |
| 1. Entries shown in red indicate that income insurance is paid. |
| 2. Bond Fund annuities are graded annuities designed to increase over time to help counter inflation. They begin as if they were a 2% annuity and increase annually at the rate of about 3% with a 5% bond fund return. See Appendix C. |
| 3. Stock fund annuities are variable annuities which begin as if they were a 5% annuity and are adjusted each year to reflect actual stock fund performance. |