N.J., PA. SENATORS PROMOTE KIDS ACCOUNTS:

U.S. Senators Rick Santorum (R-Pa.) and Jon Corzine (D-N.J.) have introduced bipartisan legislation to expand opportunities for young adults, encourage savings, and promote financial literacy by establishing investment accounts, known as KIDS Accounts, for every child in America. The senators were joined by Congressmen Tom Petri (R-Wis.), Harold Ford (D-Tenn.), Phil English (R-Pa.) and Patrick Kennedy (D-R.I.) who are introducing companion legislation in the House. “This legislation will go a long way in helping our nation’s children to understand the importance of saving and money management so they can appreciate the value of building assets over the long term,” Santorum said. “Every American child should grow up knowing that when they reach adulthood, they will have the ability to invest in themselves and in their own education,” Corzine said. The America Saving for Personal Investment, Retirement, and Education (ASPIRE) Act promises to provide a KIDS Account for every newborn child. Beginning in 2006, each account would be endowed with a one-time $500 contribution. Families and others will be allowed to contribute up to $1,000 (after-tax) into these KIDS accounts each year. When children turn 18 years old, they will have the ability to make withdrawals without penalty to pay for college or to purchase their first home. Account holders will be able to transfer them to private financial service providers after their 18th birthday.