Lifetime Savings Account Bill Introduced In Congress

“This is not acceptable,” Bodman said. “We must reduce the barriers to savings and the simplicity and flexibility of LSAs does just that.”

He added that greater national savings translates into higher investment and capital accumulation, which in turn means higher productivity, increased output, higher wages and higher living standards.

“Only in America is a penny saved, a penny taxed,” added Johnson.

That, he said, is perhaps why the savings rate in this country is in the single digits.

“That is just wrong,” Johnson said.

Frank Keating, president of the American Council of Life Insurers, Washington, praised Thomas and Johnson for drawing attention to the savings crisis, but added that LSAs would not effectively address it.

“The LSA would permit individuals unfettered access to their money, undermining the best intentions for increasing our national long-term savings,” Keating said.

Recent research, he said, finds that a majority of Americans would likely spend money from tax-free retirement savings accounts if there are no penalties for early withdrawal.

Research also indicates, Keating said, that LSAs may lead to a reduction in retirement plans sponsored by small businesses.

Reproduced from National Underwriter Edition, April 2, 2004. Copyright 2004 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.