Proposal for Tax Free Savings Accounts

[johnblake]

One of the most significant proposals affecting ER is Bush's plan for consolidating and expanding tax free savings accounts. This is a great idea, is long overdue, and will help people save for ER.

It never made sense to me that people working at a company who sponsored a 401K could save $10K+ plus tax free, and others could only save $2k. I don't think these plans should be limited to who somone works for (similar w/ health insurance).

Anyone know what happened with this proposal? Does it have a chance? Are there organizations that are lobbying for it? My guess is that the financial industry is against simplification.

 

[Michael]

President Bush is still trying to get them passed. It is uncertain at this time if he will succeed. They have been placed on the back burner for the time being.

 

[Tax Expert]

It never made sense to me that people working at a company who sponsored a 401K could save $10K+ plus tax free, and others could only save $2k.

Money that goes into a 401(k) is NOT necessarily tax free. It is tax deferred. Roth IRAs are the only tax free accounts and the maximum contribution is $3K per year (or $3500 age 50 or over).

 

[BUM]

Anyone know what happened with this proposal?  Does it have a chance?  Are there organizations that are lobbying for it?   My guess is that the financial industry is against simplification.

Back burner? I hope not. And I think the plan is still intact. The fiscal starts Oct. 1

This plan has 3 proposals all of which might well pass and are part of Bush's FY 2005 Budget. The 3 proposals consist of Ret. Sav. Accts, Lifetime Sav. Accts, Employer Ret. Sav. Accts, and Indiv. Develop. Accuonts.

The breakdown is here. http://www.treas.gov/press/releases/js1131.htm

 

[BunsOFVeal@Goofing Off]

check http://www.lifetimesavingsaccount.com for the latest update on LSA, RSA, and ERSA. I think these having these accounts would be great, but who knows if Dubya's just dangling these so that we would re-elect him?

 

[Michael]

From the linked web site:

The possibility of LSAs being enacted in 2004 is near zero.