CAPITAL REGION Schumer bill would promote savings BY JUSTIN MASON Gazette Reporter Reach Gazette reporter Justin Mason at 395-3113 or jmason@dailygazette.net.
It’s never too early to start a savings account. Tucking away money at a young age can help later on with college, a down payment on a home or the beginning of a retirement account. But in this day and age, many Capital Region families aren’t saving early enough to realize a good return on their hard-earned money. To address this, U.S. Sen. Charles Schumer, D-N.Y., is proposing a plan that would provide a matching government contribution for families willing to tuck away up to $500 for their children in a tax-free account. Money accruing in these accounts would be specifically dedicated for the cost of college, the purchase of a home or retirement in an effort to promote savings and financial literacy. “At a time of record college prices and financial uncertainty, providing seed money so our children start to save early is more important than ever,” Schumer said in a statement. “Providing these lifetime savings accounts will take some of the burden of paying for college off the shoulders of struggling middle-class families, make it easier for account holders to buy homes, and promote long term savings.” Dubbed the American Saving for Personal Investment, Retirement, and Education Act, the bill would provide all United States-born children with a $500 savings account at birth. Friends, family or companies could contribute up to $2,000 annually to the account, with the government providing a dollar-for-dollar match of up to $500 for children in households that make below 75 percent of median income. Account holders would not be able to access the funds until they turn 18 years old. Afterward, their account would be governed much like a Roth Individual Retirement Account. Once the account holder turns 25, withdrawals could be used to purchase a home or to supplement other retirement savings. By establishing the accounts, Schumer hopes children will be more likely to save for their future. In the Capital Region, 12,500 newborns a year would have a total of $6,241,000 in savings at birth, while 5,900 of these children will be eligible for supplemental funds. An account holder from a family below the median income that makes the maximum $2,000 annual contribution and experiences an average 5 percent return each year would have $72,000 for college, $118,000 for a house and almost $1.1 million for retirement, according to figures provided by Schumer.
Upchuck is kidding...right? This is no different than the social security speech over 60 years ago. If this takes off, it will be yet another government beast just like SS. It will start with the government throwing money in the pot. Then the people will have to contribute. Then the employers and perhaps even school systems will have to contribute.
THEN when it grows into a huge beast, the government will 'borrow' money from it to subsidize other government programs and will cry how THAT education savings system is going broke.
Who will be the overseer's of this proposed joke? The government? I DON'T THINK SO!
When the INSANE are running the ASYLUM In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. -- Friedrich Nietzsche
“How fortunate for those in power that people never think.” Adolph Hitler
Logged
