Individual Retirement Accounts

An individual retirement account (hereafter referred to as an IRA) is a deposit held in an account for a period of time, during which further deposits may be made and interest is accrued. Interest accrues on the initial balance and periodic deposits with a fixed periodicity (e.g., monthly, daily). The amount of money initially deposited in the IRA is called the current balance, and the final balance of the IRA at the end of its term (which depends upon the current and retirement ages of the account holder) is called the future value.

The SCE allows the computation of an IRA two different ways: specify the initial balance, periodic deposit amount, current and retirement ages, and interest rate to compute the future value; or compute the necessary periodic deposit amount to achieve a target future value.

Sample Request

The following is a sample request for an IRA calculation, where the future value is computed based upon an initial balance, periodic deposit amount, current and retirement ages, and interest rate.

<?xml version="1.0" encoding="UTF-8" standalone="no"?>
<!DOCTYPE inIRA SYSTEM "inIRA.dtd">
<inIRA CalcType="getFutureValue" Compounding="annual">
  <BeginBalance>10000.00</BeginBalance>
  <Deposit DepositFrequency="annual">2000.00</Deposit>
  <IntRate>8.000</IntRate>
  <CurrentAge>38</CurrentAge>
  <RetireAge>65</RetireAge>
  <FutureValue></FutureValue>
</inIRA>

Sample Response

The following is a sample response generated by the previous sample request:

<?xml version="1.0" standalone="no" ?>
<!DOCTYPE outIRA SYSTEM "outIRA.dtd">
<outIRA>
    <CalcResult>Valid Calculation</CalcResult>
    <BeginBalance>100000.00</BeginBalance>
    <Deposit DepositFrequency="annual">2000.00</Deposit>
    <IntRate>8.000</IntRate>
    <CurrentAge>38</CurrentAge>
    <RetireAge>65</RetireAge>
    <Term Units="years">27</Term>
    <FutureValue>268558.27</FutureValue>
    <Yield>8.000</Yield>
    <Gain>204558.27</Gain>
</outIRA>