This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

The True Cost of an iPhone? Try $17,670

Hey -- did you hear about the $17,670 iPhone?

No, it's not a gold-plated version designed for Paris Hilton.

It's the one everybody's buying. The one in your local Apple (AAPL - Get Report) store.

You may even have bought one ... without realizing it.

That's because, for most Americans, the true cost of Steve Jobs' latest "must-have" product isn't what's on the sticker. It's what they had to plunder from their retirement savings -- if any -- to pay for it.

Do the math ... if you can stand it.

A $599 iPhone comes with a minimum service plan of $60 a month for two years. Outlay: $2,039.

But if it's not a work expense, a customer in, say, the 25% tax bracket actually had to earn $2,720 to pay the bill.

Sound bad? It's even worse.

Take an iPhone customer who's 30 years old and is not maxing out contributions to his or her 401(k) retirement plan (few are).

In that case, the $2,720 could have been invested tax free. Earning a pretty reasonable 5.5% after inflation over the next 35 years, it would have grown to ... $17,670.

You read that right.

In short: That's how much this customer withdrew from retirement savings to pay for an iPhone.

And if he or she used a credit card and takes a year to pay off the debt, the true cost rises above $19,000.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
AAPL $124.75 0.00%
FB $80.78 0.00%
GOOG $524.05 0.00%
TSLA $206.79 0.00%
YHOO $44.45 0.00%

Markets

DOW 17,826.30 -279.47 -1.54%
S&P 500 2,081.18 -23.81 -1.13%
NASDAQ 4,931.8150 -75.9760 -1.52%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs