A Way We Can Help Kids Save for the Future (Rep. Connie Mack)
Last week, I introduced legislation in the House – cosponsored by 12 Members of Congress – that will allow parents to open a Roth IRA for their children. H.R. 2163, the Kids Invest and Develop Savings (KIDS) Act, will also allow parents, grandparents, and others to make contributions to that Roth IRA, and count that contribution toward the Retirement Savings Tax Credit.
Current law severely restricts the ability of children to benefit from Roth IRAs, which are proven and effective investment tools. The KIDS Act will correct this disparity and give children a significant jump-start on saving and investing for their futures.
For example, if $1000 is invested into a Roth IRA for a person who is born this year, and $1000 is invested every year until that person reaches retirement, that person would have accrued well over $2 million [future value] in savings, assuming an eight percent annual return.
Extending this investment option to our children and grandchildren is a common sense way to help them achieve a secure and prosperous future.