ABSTRACT
The proposed legislation called for eliminating deductible individual retirement account (IRA) contributions for those covered in pension plans. IRA participation by the lower income brackets has lagged. The more completely living expenses consume available discretionary income, the narrower the latitude for savings of any kind. Initial marketing has in some instances conveyed a misleading impression that the IRA contribution must be made in one lump sum. IRA marketing has been fairly unimaginative, generally stressing the tax advantage of the maximum contribution while limiting competitive positioning to matters of rate and convenience alone. IRAs differ from pension programs, but they resemble 401(k) plans in that individuals can contribute their earned dollars in a manner where those dollars remain totally within the individual’s control. If IRAs were to return to their 1981 tax status, self-directed IRAs may be the only form of the account which makes any sense at all.
