Automatic 401Kids Savings Accounts for Every US Child with Federal Deposits.
This Act establishes new, automatically created 401Kids Savings Accounts for every US citizen child. The federal government will provide initial deposits and matching contributions, particularly benefiting lower-income families. Funds grow tax-free and can be withdrawn after age 18 for crucial life expenses like education, first-time home purchase, or starting a small business.
Key points
Every eligible child receives an automatic 401Kids Savings Account, seeded with annual federal deposits ranging from $500 to $750, depending on family income and EITC eligibility.
Account balances up to $100,000 are disregarded when determining eligibility for most federal means-tested benefits, protecting access to assistance programs.
Tax-free withdrawals after age 18 are permitted for qualified expenses, including higher education, trade certificates, first-time home acquisition costs, and small business loans.
The bill establishes a Federal 401Kids Account Program to ensure children in states without their own program still receive an account and federal contributions.
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