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House Smart to Support IRA Rule Change

Cal Thomas | Syndicated columnist | Monday, May 7, 2001

House Smart to Support IRA Rule Change

One of the significant economic events coming out of Washington in the last few days was the overwhelming vote by the House to raise the maximum contribution a person can make to his or her individual retirement account. For years $2,000 has been the maximum you could put in an IRA and get a tax deduction. The House voted to raise it to $5,000. Now if the stingy Senate will only go along.

If one starts saving early in a working career - say in their 20s - compound interest will give an individual more than $1 million in retirement funds. A couple could sock away more than $2 million in savings.

This would reduce pressure and reliance on the Social Security system and give people more of their own money. Coupled with a tax cut, the financial security of many families would be assured.

The House also voted to raise the limit of other employer-sponsored plans from $10,000 to $15,000. It's about time and it empowers more of us and less of government. Now let's see what the Senate does.