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Show THE VOICE OF BUSINESS r Startling figures : on growvto otf IRA's By Richard L. Lesher, President Chamber of Commerce of the United States Having worked for NASA, I have witnessed some pretty spectacular blast-offs in my time, but what has happened to Individual Retirement Accounts (IRAs) since new eligibility rules took effect on Jan. 1 rivals the best of them. By the end of January, just one month after all American workers became eligible to deposit up to $2,000 a year in tax-deferred IRAs ($4,000 for a two-income married couple; $2,250 for a taxpayer with a non-working spouse) new IRA deposits totalling at least $3.6 billion were registered. By the end of February, those deposits grew to $5.9 billion. By the end of March, the total reached $8.7 billion. For sake of comparison, consider that in 1978, the last year for which complete figures are available, IRA deposits for the entire year checked in at just under $3 billion. Thus, in January we had already surpassed the amount of deposits for all of 1978. And remember, 1978 was a growth year for our economy, whereas in January the current recession hit rock bottom. Actually, these preliminary figures for the first quarter of 1982 don't tell the whole story. While the $8.7 billion in new IRA deposits includes accounts set up with commercial banks, mutual" savings banks, savings and loans credit unions and mutual funds, they do not include IRSs set up with insurance companies and securities firms, as well as direct stock and bond investments that are a feature of many self-directed IRAs. Yet just one major insurance company estimates that it has already opened 200,000 new IRAs this year Obviously, complete data, which are not currently available, would reveal an even more dramatic explosion of I . IRAs. ) When the Economic Recovery t Act of 1981 was signed into law i : August, I said then that the previa that opens IRAs to all workers was a unheralded "sleeper" of thai t reform package that it would cte the saving pattern of the naft t significantly enlarge the capital p j that can be used for busing . n investment and expansion, and p. c Americans the opportunity to lies e provide for their retirement, But' believe that the spectacular grwli f; IRAs now under way cannot 1 fc explained by the new tax law alone The fact is that even before the b (; changed on January 1, about 50 pens: ' of the American work force n c already eligible to open IRAs. It is tie t-that t-that the IRA success story now in j ! making is not only a product 1 h liberalized eligibility, but a desire i y. the part of Americans to seize ti it opportunity for greater self-reta i Individual retirement accoic J-coupled J-coupled with staged reductions t ' personal tax rates, offer workers at a! 1 income levels the incentive and ft ' opportunity to provide a secure file " for themselves and their families. ' Fear about the future of Soci Security has likely added to ft impetus. The handling of Sorii : Security's financial problems : Washi ngton the sharr.e . demagogery, political exploitations ; continued evasion of needed reforms: make the system solvent- ; convinced many Americans that 11? had better get serious about pro: ; for themselves. t But whatever the reasons, fc , impressive beginnings of a huge if . capital fund for economic growth as ,. personal security is one of the r positive stories of the decade. J , remember you read it here first! t |
