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How often does a 1% I-Bond beat the S&P500 over 30-years?

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How often does a 1% I-Bond beat the S&P500 over 30-years?


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This article was posted on June 8, 2004.

Answer: Never.

Using the Retire Early Safe Withdrawal spreadsheet re2002i.xls, the investment returns for both the S&P500 and an I-bond with a 1% coupon were compared for each of the 100 30-year periods from 1871 to 2002. The terminal value of a $1,000 initial investment at the end of 30 years is reported in the table below. There was no 30-year period where a 1% I-Bond beat the S&P500.

Note: The S&P500 is assumed to have a 0.20% annual expense ratio. The I-bonds are expense free.


 
Start	I-Bond@1.00%	S&P 500	   
1871	 $   2,228 	 $   6,777 	   
1872	 $   2,249 	 $   7,009 	   
1873	 $   2,411 	 $   6,822 	   
1874	 $   2,411 	 $   5,842 	   
1875	 $   2,492 	 $   7,252 	   
1876	 $   2,516 	 $   8,324 	   
1877	 $   2,607 	 $   9,584 	   
1878	 $   2,607 	 $   7,680 	   
1879	 $   2,720 	 $   9,112 	   
1880	 $   2,493 	 $   7,181 	   
1881	 $   2,493 	 $   5,556 	   
1882	 $   2,284 	 $   5,694 	   
1883	 $   2,475 	 $   5,884 	   
1884	 $   2,551 	 $   5,895 	   
1885	 $   2,602 	 $   6,290 	   
1886	 $   2,706 	 $   6,401 	   
1887	 $   3,044 	 $   6,242 	   
1888	 $   3,477 	 $   5,300 	   
1889	 $   4,139 	 $   5,971 	   
1890	 $   4,890 	 $   6,625 	   
1891	 $   4,723 	 $   6,144 	   
1892	 $   4,723 	 $   5,683 	   
1893	 $   4,356 	 $   6,838 	   
1894	 $   4,530 	 $   8,699 	   
1895	 $   4,576 	 $ 10,534 	   
1896	 $   4,667 	 $ 12,488 	   
1897	 $   4,667 	 $ 13,461 	   
1898	 $   4,489 	 $ 15,253 	   
1899	 $   4,381 	 $ 17,326 	   
1900	 $   3,748 	 $ 15,309 	   
1901	 $   3,748 	 $ 10,148 	   
1902	 $   3,621 	 $   5,253 	   
1903	 $   3,270 	 $   4,490 	   
1904	 $   3,380 	 $   8,155 	   
1905	 $   3,404 	 $   5,821 	   
1906	 $   3,454 	 $   7,348 	   
1907	 $   3,377 	 $   9,594 	   
1908	 $   3,435 	 $   8,769 	   
1909	 $   3,293 	 $   7,352 	   
1910	 $   2,955 	 $   6,578 	   
1911	 $   3,027 	 $   6,247 	   
1912	 $   3,405 	 $   5,582 	   
1913	 $   3,416 	 $   6,192 	   
1914	 $   3,447 	 $   7,935 	   
1915	 $   3,491 	 $   9,908 	   
1916	 $   3,466 	 $ 10,507 	   
1917	 $   3,640 	 $   8,625 	   
1918	 $   3,353 	 $ 10,499 	   
1919	 $   2,881 	 $   9,924 	   
1920	 $   2,439 	 $   9,776 	   
1921	 $   2,662 	 $ 14,799 	   
1922	 $   2,805 	 $ 16,274 	   
1923	 $   2,833 	 $ 14,482 	   
1924	 $   2,782 	 $ 14,170 	   
1925	 $   2,761 	 $ 16,336 	   
1926	 $   2,679 	 $ 16,787 	   
1927	 $   2,786 	 $ 16,122 	   
1928	 $   2,916 	 $ 11,306 	   
1929	 $   2,986 	 $ 10,773 	   
1930	 $   3,017 	 $ 12,621 	   
1931	 $   3,099 	 $ 16,822 	   
1932	 $   3,151 	 $ 32,439 	   
1933	 $   3,225 	 $ 34,220 	   
1934	 $   3,204 	 $ 26,982 	   
1935	 $   3,140 	 $ 33,633 	   
1936	 $   3,154 	 $ 24,613 	   
1937	 $   3,194 	 $ 17,512 	   
1938	 $   3,287 	 $ 28,393 	   
1939	 $   3,466 	 $ 27,331 	   
1940	 $   3,706 	 $ 24,313 	   
1941	 $   3,847 	 $ 28,195 	   
1942	 $   3,568 	 $ 34,578 	   
1943	 $   3,435 	 $ 34,126 	   
1944	 $   3,650 	 $ 23,576 	   
1945	 $   3,989 	 $ 15,999 	   
1946	 $   4,164 	 $ 16,001 	   
1947	 $   3,708 	 $ 19,954 	   
1948	 $   3,594 	 $ 17,823 	   
1949	 $   3,879 	 $ 18,777 	   
1950	 $   4,462 	 $ 18,722 	   
1951	 $   4,617 	 $ 17,583 	   
1952	 $   4,796 	 $ 13,767 	   
1953	 $   4,956 	 $ 15,484 	   
1954	 $   5,106 	 $ 17,984 	   
1955	 $   5,326 	 $ 13,414 	   
1956	 $   5,512 	 $ 13,136 	   
1957	 $   5,430 	 $ 16,023 	   
1958	 $   5,453 	 $ 16,596 	   
1959	 $   5,628 	 $ 14,072 	   
1960	 $   5,861 	 $ 16,015 	   
1961	 $   6,088 	 $ 15,002 	   
1962	 $   6,205 	 $ 16,544 	   
1963	 $   6,322 	 $ 18,237 	   
1964	 $   6,377 	 $ 16,850 	   
1965	 $   6,493 	 $ 14,754 	   
1966	 $   6,544 	 $ 17,806 	   
1967	 $   6,518 	 $ 24,017 	   
1968	 $   6,387 	 $ 26,451 	   
1969	 $   6,221 	 $ 31,387 	   
1970	 $   6,015 	 $ 39,329 	   
1971	 $   5,893 	 $ 34,928 	   
1972	 $   5,808 	 $ 26,704 	 


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