Allow Children to Save for Their Futures

Congressman Connie Mack (R-FL 14th) is currently serving his second term in Congress. He is a member of the House Transportation and Infrastructure, Foreign Affairs, and Budget Committees. Mack is a strong advocate for greater fiscal responsibility and is a champion of tax cuts and other pro-growth economic policies.

Earlier this year, Kathleen Casey-Kirschling, the nation’s first “baby boomer,” received her first Social Security retirement check in the mail. Casey-Kirschling is the first of nearly 80 million American baby boomers who will become eligible for Social Security over the next two decades.

While 80 million baby boomers is a staggering number, what’s even more astounding is that in only nine years, the Social Security program will begin paying more in benefits than it collects in taxes, according to the program’s trustees.

Clearly, our Social Security program as it is structured now will not remain solvent for our children and grandchildren. That’s why I have introduced legislation to allow families to invest in their children’s futures. I know it’s an idea that Alliance readers overwhelmingly support, based upon your careful and thoughtful responses to a recent Alliance legislative survey. Your participation in the survey is very much appreciated and will allow me to make a strong case for this legislation.

The Kids Invest and Develop Savings (KIDS) Act (H.R. 2163) would allow parents to open a Roth IRA for their children and would also allow parents, grandparents, and others to make contributions to that Roth IRA to create a head start on a lifetime of savings and investing. The legislation would also enable those who contribute to a child’s Roth IRA to count that contribution toward the Savers Credit (formally known as the Retirement Savings Contributions Credit).

Roth IRAs are proven and effective investment tools that are helping millions of Americans save and invest in their futures. Unfortunately, current law severely restricts the ability of children to benefit from these investment vehicles. The KIDS Act will correct this disparity and give children a significant jump-start on saving and investing for their futures.

For example, if $1,000 is invested into a Roth IRA for a person who is born this year, and $1,000 is invested every year until that person reaches retirement, that person would have accrued well over $2 million in future value savings, assuming an eight percent annual return.

Expanding Roth IRAs and making the Savers Credit available to more Americans is a great way to encourage responsible retirement saving. Extending this investment option to our children and grandchildren is a common sense way to help them achieve a secure and prosperous future.