European Stars and Stripes (Newspaper) - February 5, 1992, Darmstadt, Hesse                                Page 18 a the stars and stripes wednesday february 5,1992 Money matter Bush s flexible Ira gets favourable reception by Leslie Wayne the new York times it goes by the name flexible individual retirement account but what president Bush proposed last week might better be described As a savings program for mid dle income people. A a it a a Misnomer to Call it a retirement plan a said Stephen Corrick a tax partner at the Washington office of Arthur Andersen amp co. A but it certainly is flexible and it provides tax advantaged savings and there a nothing wrong with  As part of president Bush a attempt to revive a sagging Economy the administration proposed a series of tax Breaks in the election year budget for investors and Middle income families. Among them is the proposal to create a new Type of Ira to be called a flexible Ira. Contributions to a flexible Ira would not be tax deductible by contrast some existing iras Are deductible primarily those for taxpayers without a company pension plan or whose incomes fall below $25,000 for individuals and $40,000 for couples. But earnings in a flexible Ira could be withdrawn tax free after seven years by contrast for existing iras the withdrawals Are taxed. A a it a a great proposal for people who can take advantage of it a said Stephen Pennachio a tax partner at Komg peat Marwick. A a it a very similar to a municipal Bond. And for those who cannot deduct the existing iras and who qualify for this its a wonderful  under the Bush administration proposal an individual with an adjusted Gross income of under $60,000, a head of household with an adjusted income under $100,000 and a married couple whose adjusted income is under $120,000 can qualify to invest up to $2,500 a year in a flexible Ira. A person withdrawing Money from a flexible Ira within three years would face a tax Bill plus a 10 percent penalty for Early withdrawal penalty. Withdrawals made Between years three and seven would be taxable but would not be penalized. Tax planning experts say a flexible Ira is designed for people who want to accumulate savings Over a medium length of time most Likely to buy a House or finance a child a College education. A the seven year time period encourages people to keep it there and not grab it right away a said George . Barbee executive director of client services at Price waterhouse. A personally its a Trade off. Id like to see people saving for retirement. But there a a real movement for help for a first Home or for an  for the Economy the program is designed to increase the Domestic savings rate which is considered crucial to Lon term International economic competitiveness. At the same time it is designed to answer critics of president Bush who say that far too Many of his tax proposals Are designed for the wealthy and ignore the Middle income earners. The Treasury department estimates that the plan will Cost the $2.8 billion Between now and 1997. It must be approved by a democratic controlled Congress and How Congress will react is unclear. However Robert Willens a tax and accounting analyst at Lehman Brothers inc., said it is a very much a mainstream proposal and in line with what Many in Congress had been proposing As recently As last  without health insurance a crap shoot by Lisa Levitt Ryckman the associated press new York a the last time Douglas Cohen ran a fever his Mother did some Hasty calculations. One visit to the paediatrician $70. Antibiotics $35. Follow up visit $35. Lost time from work $50. Lost time from toddler program $50. Total Bill $240. Douglas did no to go to the doctor. A because it was so much Money i thought id wait a couple of Days and see if head get better which is something i had really never done in the past a said Douglas Mother Diane. A these Days i have to think about the financial aspects of his  the Cohens a Ted Diane 8-year-old Jessica and Douglas 214 a Are resolutely Middle class. And like 38 million other americans they have no health insurance. What they do have is a cozy duplex Coop apartment furnished with relatives castoffs in the Park slope Section of Brooklyn an 8-year-old Volvo Sedan teds Mother sold them for a song and a daunting pile of Bills each month. They Send Jessica to Public school clip coupons for groceries and rely on doting grandparents for new shoes. As a self employed cabinetmaker Ted plays a constant game of catch up using this years orders to pay off last years Bills and hoping to break even next year. Diane works As a bookkeeper on tuesdays and thursdays mostly to pay for a toddler program for Douglas those Days. For now she would rather stay Home with her son than work. But when he goes to school her highest priority will be finding a Job with health insurance. Douglas fever lasted for two Days and when it broke both he and his Mother breathed a Little easier although she still was unsure whether his ears were infected. She took what she considered a necessary risk something she would rather not do. A with two children its really a crap shoot that nobody will get sick that no one will break a leg a Diane said. A they have to stay  so must Diane and her husband. Diane has not been investors guide Diane Cohen with children Jessica 8, and Douglas 2v4, must make hard choices when there is sickness in the family. To her gynaecologist in almost three years. She chose to have a Mammogram Over a Pap test when she decided she could not afford both. They Only recently finished paying off the $7,000 Bill for their songs birth in May 1989. A the question is which doctor is going to get my Money a she said. A sometimes i feel like its a Roulette game that in a just tempting Fate. Because god forbid if any of us really did get sick i done to know How wed Ever pay the  about putting savings Bonds in an Ira by Bill Doyle q. We have about $11,000 in an individual retirement account certificate of Deposit. As we Are not Many years from retirement we probably wont be Able to add to it. Can we Roll this Ira cd Over to series be . Savings Bonds we Are considering doing this because we Are angry with our Bank. A. You can to hold be Bonds or their predecessor e Bonds in an Ira. Even if that was allowed it would be a foolish thing to do. Federal income tax on the interest building up ones and yes can be deferred until the Bonds Are redeemed. Earnings such As interest in an Ira Are deferred until withdrawn. So having is and or yes in an Ira would be redundant and counterproductive or As a Fine old gentleman with whom i worked for Many years would say a unscrewing the  you could take your Money out of that cd and put it in yes. However assuming the contributions you made to the Ira were tax deferred you would have to pay Federal income tax on that entire withdrawal. A far better move would be to shift your nest egg to an Ira elsewhere. That a trustee to trustee Transfer not a rollover. You have wide Choice of where to have a new Ira Banks saving and loan associations credit unions brokerage firms Mutual funds and insurance companies. But Here a a Strong word of caution. Arrange with your new Ira trustee to have your Money moved Only when that cd matures. If you shift earlier you could be hit with a stiff Early withdrawal penalty. Q. For 32 years we were excelled creditworthy customers and yet last summer our Bank required us to use an Auto As Security on a $5,800 loan. We Felt we deserved an unsecured loan. Do you agree with us or the Bank a. I come Down on your Side of this argument. But i am also Well aware that As this recession rolled along and they got stuck which More and More bad Loans Banks tightened their lending policies. Many Long term Good customers were surprised when their Banks demanded collateral or Flat out Reft ised Loans. For the banking Industry it was a matter of tighten up or go belly up As was the unhappy Fate of a goodly number of Banks and a amp is. Now that the discount rate a at which Banks borrow from Federal Reserve Banks a has been slashed to 3 j percent the lowest in almost 30 years we should see easing of Bank lending policies. You might even try renegotiating your loan to get your car out of Hock. Q. I have a self directed Ira and a regular account totalling More than $500,000 with a Large brokerage House. I do a lot of Stock and Bond trading and would like to Transfer both accounts to a discount brokerage to save on commissions. How do i move the accounts a. Contact a number of discount brokerages and pick the one to which you want to shift the accounts. Make sure it provides the service you want. Sign automatic account Transfer forms which the discounter should provide. Your accounts should be moved with a minimum of Aiss within a reasonably Short time if they contain simple securities such As stocks Bonds Mutual funds and cd. If your holdings include limited partnership units and other esoteric items it could take a great Deal longer. C Wing features