Congressional Changes

As we begin to enter the spring season, at least as far as unseasonably warm weather, we would like to share a few thoughts with you.

The good news is that Congress has made two changes for the better in the retirement and college planning areas.

As you may know, the Section 529 plans have been greatly improved, and are definitely worth a look if you have children or grandchildren under college age. The new elements to these programs are the potential federal tax-free growth of investment as well as tax-free removal for college, and the provision that any remaining money does not have to be spent for a beneficiary at age 21, as under UGMA accounts.

The changes in retirement planning are that you can now potentially put away up to $3,000 per person in your IRAs for 2002 and forward, and as much as $11,000 in your 401(k)s.

If these are of interest to you, please just let us know and we can discuss them further.

As always, please call with any questions or issues you may have, and may we all have a better year than last in all respects!

For more complete information, including a description of fees, expenses and risks, you should review the plan offering statement carefully.

State income taxes may continue to apply. Please consult your tax counsel regarding tax consequences under your specific circumstances.

Under the Economic Growth and Tax Relief Reconciliation Act of 2001, tax-free distributions may not be available after 2010, depending on future congressional action to extend the benefit.