Milwaukee (Feb. 20, 2003) -- Eighty-three percent of Americans would use one or more of the Bush Administration's proposed savings accounts if they were made available, and nearly 60 percent of respondents believe the accounts will help them save more, according to a survey conducted for Strong Financial Corp.
President Bush's budget proposal would create three new savings vehicles. The Lifetime Savings Account (LSA) and Retirement Savings Account (RSA) would feature contribution limits of $7,500 per year and tax-free growth. An LSA could be used to save for any purpose, while the RSA is designed for retirement savings. The Employer Retirement Savings Account (ERSA) would simplify workplace retirement plans, such as 401(k) and 403(b) plans, into one savings vehicle.
Among survey respondents, 71.3 percent will use a Lifetime Savings Account, 57.8 percent will use a Retirement Savings Account, while 65.5 percent will use an Employer Retirement Savings Account.
Survey participants cited tax-free growth for any savings purpose (32.6 percent) and withdrawals that can be taken at any time without penalty (32.4 percent) as the most appealing features of the accounts. Another 14.4 percent said the simplicity of the rules is most appealing, while 13.4 percent cited the higher contribution limits.
But while 63 percent said the LSA would help them save more money than they currently put away, roughly 56 percent of survey participants said they would use an LSA for some of their future retirement contributions instead of investing those contributions in an RSA or ERSA, and almost half said they would be worried about the temptation to use these retirement savings for other purposes, Strong reported.
-- Electronic Accountant Newswire Staff
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