- Feb 12, 2003
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In an era where the low savings and high debt load of our nations citizens is bemoaned more and more, this is a longtime Bush proposal that might finally get some traction. Basically the thinking is this, one of the reasons people don't save much is because savings are TAXED! ING Savings accounts, mutual finds, stocks, you've gotta pay taxes on all of em. And look at Debt! Debt can be used as a tax deduction when you have a mortage or HELOC (people rack up CC charges, then refi...) Basically, our country is not helping the savings cause by rewarding debt and punishing savings.
Have any of you heard of the new lifetime savings accounts that have been proposed to address this? God I want this to become law, but it's an uphill battle. Basically, LSA's are the same as Roth IRA's, except there are no rules on when you can withdraw the money. The current proposal allows you to contribute $5000 per year.
Basically, it's a tax free investment, savings, whatever account that a person can have. I think with these, people might actually start saving! It would probably help retirement savings too, while having an LSA would greatly reduce the popularity of IRA's, (why invest in a tax sheltered account that I can't touch till 59 1/2 when I can do the same thing and take the money out tomorrow?) but even with that said, it will help retirement savings because people who don't invest because they don't like the idea of not having access to their money for 20 or 30 years can use LSAs for retirement purposes if they wish too.
Here is a link to a LSA advocacy website with some articles and a link to the actual legislation that is proposed. http://www.lifetimesavingsaccount.com/
Have any of you heard of the new lifetime savings accounts that have been proposed to address this? God I want this to become law, but it's an uphill battle. Basically, LSA's are the same as Roth IRA's, except there are no rules on when you can withdraw the money. The current proposal allows you to contribute $5000 per year.
Basically, it's a tax free investment, savings, whatever account that a person can have. I think with these, people might actually start saving! It would probably help retirement savings too, while having an LSA would greatly reduce the popularity of IRA's, (why invest in a tax sheltered account that I can't touch till 59 1/2 when I can do the same thing and take the money out tomorrow?) but even with that said, it will help retirement savings because people who don't invest because they don't like the idea of not having access to their money for 20 or 30 years can use LSAs for retirement purposes if they wish too.
Here is a link to a LSA advocacy website with some articles and a link to the actual legislation that is proposed. http://www.lifetimesavingsaccount.com/
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