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To: Mohan Marette who wrote (90225)	1/20/1999 1:30:00 PM
From: my2boys	Read Replies (1) \| Respond to of 176387

<<Good idea, or like the 401 K mutual fund investors are given a option to choose between money market,growth or a combination of of the two,don't see any government influence in that.>> As a former gov'ment worker…. Any money that they let us keep out of SS could be required to be placed in an approved retirement plan, perhaps one modeled on the gov'ments TSP (Thrift Savings Plan). There are only a few fund options, and strict rules on withdrawing funds. I guess the point here would be to let us participate in the market with our "contributions," and to create a honest to God account with my name on it that I can be fairly confident will be there when I retire.

To: Mohan Marette who wrote (90225)	1/20/1999 2:23:00 PM
From: DellFan	Respond to of 176387

OT Re: proposed new Roth-style 401(k) - tax free investing *POLITICAL ADVERTISEMENT* This following 401(k) plan proposal is an idea whose time has come. I favor adjusting SS benefits benefits at the higher end to take the heat off the fund and yet still provide for the elderly poor at the lower end. Personally, I prefer to do my own investing. God save us if the Feds are permitted to become the world's largest shareholder! Cut (or avoid increasing) taxes. And permit people to do more Roth-type investing. Here's a recent proposal which would help accomodate that. GO GRENNSPAN! *END OF POLITICAL ADVERTISEMENT*! Article follows: A new type of 401(k) retirement savings plan that would allow withdrawals free of taxes is expected to be proposed Friday by the chairman of the Senate Finance Committee. The proposal would greatly expand Americans' savings options and would allow them to save far more each year in retirement accounts. It could even raise money initially for the federal government because workers would pay income taxes on the money they contribute to the new plan, not on what they take out. But over the long term, it would deplete revenues and is expected to face opposition from the Clinton administration and Democrats in Congress, where it will be one of several competing ideas about how to cut taxes this year. Clinton has said he will oppose any tax cut until an agreement is reached to shore up a looming shortfall in Social Security. The major portion of the proposal, called a Roth 401(k), would be an extension of the popular 401(k) plans for employees and would operate on the same principles as the recently created Roth IRA, said Sen. William Roth Jr., R-Del., chairman of the finance committee. Roth sponsored the 1976 law giving unemployed spouses the right to Individual Retirement Accounts and the 1981 law letting anyone with a job create an IRA. Contributions to a Roth IRA are made with dollars that have already been taxed, but none of the investment earnings on that money are subject to taxes; nor are withdrawals. With conventional IRAs, workers do not pay income taxes on the money they contribute, but both the contributions and their gains are taxed when the money is withdrawn. Financial institutions reported a rush of activity at the end of last year as people opened Roth IRAs. But not everyone can contribute to a Roth IRA, which has income and other restrictions. Many more people could take advantage of a Roth 401(k) at work, paying taxes on their contributions but not on any growth in that money or any withdrawal. In 401(k)s, workers choose how to invest their money, and employers often match part of their contributions to encourage participation. Roth said he wanted to give people more incentives to save and to expand their savings options. His proposal would allow workers to increase their savings substantially in tax-advantaged accounts. The maximum annual contribution to a Roth 401(k) and a conventional 401(k) plan would climb to $15,000 from $10,000. Workers age 50 and older would be allowed to set aside as much as $22,500 a year. The current limit on IRA contributions would rise to $5,000 from $2,000, and workers 50 and older could set aside up to $7,500. Most income limits on IRAs would also be eliminated under Roth's proposal. That means that older workers with high incomes could save up to $30,000 annually through a combination of 401(k) and IRA plans, and could use any mix of traditional and Roth plans they choose. Roth 401(k) plan funds would have to be withdrawn, beginning at age 70 1/2, under the same rules as existing 401(k) plans. Roth IRAs have no such requirements on withdrawals. Rules governing employer contributions to 401(k) plans would be liberalized to allow up to $30,000 in matching contributions, now limited to 25 percent of salary. The Roth 401(k), which would be accompanied by a similar Roth 403(b) plan for government workers and employees of nonprofit groups, could in its first few years raise government revenues, which could make it easier to win approval under current congressional budgeting rules. But there are two serious downsides: It would cost the government money in the long run and most of the tax benefits would go to people with higher incomes.