Gift's goal: A brighter fiscal fate

RIPON -- One lucky baby here who might not even be born has $500 waiting in the bank.

Councilman Mike Restuccia, a retired banker and now a consultant, and his wife put up the money for the city's first baby born in 2008 whose parents make less than 120 percent of the county median income.

Restuccia laments Americans' poor savings habits and hopes that the gift will instill in the child and its family the value of investing.

"I am a strong believer in financial responsibility, and it is not something you are born with. It is a skill," said Restuccia, who also is board chairman of the San Joaquin County's $2.2 billion retirement system. It covers 10,800 present, former and retired employees or their beneficiaries.

"I see what people retire on, and some people don't even retire on enough to pay their medical bills," he said. "There are all kinds of statistics showing that less than 2 percent of the population has a net worth exceeding a million dollars. In a country like ours, that is not a lot of money in today's world. It is just not."

The median account balance in 401(k)-style accounts among workers ages 55 to 64 was $50,000 in 2004, according to a report by the U.S. Government Accountability Office released last month.

The figures are more dire for today's teenagers. Those born in 1990 are estimated to have about half that when they retire.

John Hall, spokesman for the American Bankers Association, said people often believe saving is harder than it is.

"Every little bit helps," he said. "I think a lot of people see saving as somewhat overwhelming, but direct deposit and being able to move money between accounts in an automated fashion can force you to set money aside without even seeing that money."

He said tax returns are one opportunity. Beginning this year, those filing income tax returns will have the option of having their refund split and directly deposited into more than one bank account, he said.

The association holds an annual Teach Children to Save Day for elementary school students and a Get Smart About Credit program for young adults.

Restuccia said he came up with the idea for the account a few weeks ago. He and his wife, Mona, are setting up the account at brokerage Charles Schwab.

The $500 won't assure a lofty retirement, Restuccia acknowledged, but over the years, it could appreciate to $3,000, $4,000 or even $5,000.

"That's not a lot of money," he said, "but whoever gets this could put $25 a month in for the child and when he or she is old enough, he or she can get online and trade a few stocks and learn how money works, and maybe that will make them more financially responsible as they get older. That's the hope."

He said he hasn't decided whether the child will be able to access the money at age 18. Otherwise, the child would gain access at 21.

"When they get out of high school, maybe they decide they want to go to college or trade school or they want to buy a house, or whatever, and this money would be there." Restuccia said.

Bee staff writer Inga Miller can be reached at imiller@modbee.com or 578-2324.