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A contribution of $50 a month over 25 years:
Balance = $21,900
Tax savings =$4,375
Increasing the contribution to $200 a month over 25 years:
Balance = $87,500
Tax savings =$17,500
Making the maximum family contribution of $6,150 over 25 years:
Balance = $224,225
Tax savings =$44,845
Assumptions: All calculations are based on a Federal tax rate of 15%, State tax rate of 5%, and average interest rate of 3%. Figures are provided for illustration purposes only. Actual results may vary.