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		Home Page Bush calls for revised savings plans By Thomas A. Fogarty, USA TODAY WASHINGTON — The Bush administration on Monday renewed its call for Congress to simplify the web of tax-preferred savings accounts for retirement and education. It's a modified version of a failed plan submitted by Bush a year ago, and is included in the president's $2.4 trillion federal budget for 2005. The plan would "make savings simple for everyone and for every purpose," said Assistant Treasury Secretary Pamela Olson. Under the plan, existing tax-favored accounts — IRAs, Education Savings Accounts, 401(k)s and the like — would be succeeded by three primary savings vehicles: • Lifetime Savings Account. Investors could save up to $5,000 a year under a tax arrangement similar to the current Roth IRA. Contributions would be taxed, but gains would not. Investors could withdraw the money at any time for any purpose without paying taxes. • Retirement Savings Account. Separately, investors would be permitted to save for retirement in Rothlike accounts. Up to $5,000 could be invested per year. Withdrawals taken after age 58 would be tax-free. • Employer Retirement Savings Accounts. Popular 401(k)s and similar employer-sponsored plans would be replaced by accounts that, from the worker's point of view, would look very similar. Contributions would be tax deductible, and limits would be unchanged. Withdrawals at retirement would be taxed as ordinary income. Most of the proposed changes would simplify the accounts for their sponsors. No existing tax-sheltered accounts would be cut, though most would be ineligible for new contributions. State 529 college savings plans and Health Savings Accounts would be unaffected. Benefits of the Bush plan would be available to savers regardless of income, prompting some lawmakers to complain it favors the rich. In 2003, Bush's proposal failed to pass, partly because the administration made tax cuts a higher priority. The same is true this year: Bush's top tax objective is making the cuts permanent. The insurance industry is expected to oppose LSAs, as it did last year. Lack of restrictions would mean that most savers would make their first investments in LSAs. That would mean they'd spend less on annuities and other insurance products. "It would turn the life insurance industry on its head," says Principal Financial Group CEO Barry Griswell.   Back to Original Article: Mortgage News You Can Use   Continue with: Wages, factory hiring fall 2 engines of growth power economy Job cut announcements jump
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