Washington (April 5, 2004) -- The proposed Lifetime Savings Accounts Act of 2004 (S. 2263), sponsored by Sen. Craig Thomas, R- Wyo., and its companion bill (H.R. 4078), sponsored by Rep. Sam Johnson, R-Texas, put into motion one-third of the retirement simplification proposals that President George W. Bush introduced last year -- and re-introduced in his budget plans earlier this year.
Individuals could contribute $5,000 a year and withdraw money penalty-free at any time. Although contributions would not be deductible, earnings would accumulate tax-free. Withdrawals would not be taxed either. The accounts require no income or age limits. Contributors would have discretion on how they use the money. Also, existing education savings accounts -- both 529 plans and Coverdell accounts -- could be converted into LSAs.
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