WGN-TV Show Notes — February 18, 2003

ANCHOR: WITH ALL THE WAR TALK ABOUT IRAQ, AND THE RECENT SPACE SHUTTLE DISASTER, A FEW OF THE MORE INTERESTING PARTS OF PRESIDENT BUSH’S RECENT BUDGET PROPOSAL WERE OVERLOOKED.

ANCHOR: FORTUNATELY, WGN’S MONEY SAVING EXPERT ILYCE GLINK CAUGHT THE DETAILS AND IS HERE WITH A LOOK AT HOW YOU MIGHT BE ABLE TO PUT AWAY MORE MONEY TAX FREE IF THE PROPOSAL PASSES

GOOD MORNING.

ILYCE: PRESIDENT BUSH’S RECENT BUDGET PROPOSAL CONTAINED SEVERAL NEW SAVINGS PLANS THAT COULD GIVE CONSUMERS THE ABILITY TO SAVE BIG BUCKS TAX FREE AND OVERHAULED THE EXISTING 529 COLLEGE TUITION PLANS ALREADY IN PLACE. LET’S TAKE A LOOK

LIFETIME SAVINGS ACCOUNT
– $7,500 PER YEAR, AFTER TAX
– CASH GROWS TAX-FREE FOREVER
– WITHDRAWALS AT ANY TIME

ILYCE: THE FIRST NEW ACCOUNT WOULD BE CALLED THE LIFETIME SAVINGS ACCOUNT. IT’S A LITTLE LIKE A ROTH IRA, BECAUSE EACH INDIVIDUAL COULD PUT UP TO $7,500 EACH YEAR, AND THE CASH GROWS TAX-FREE FOREVER. UNLIKE A ROTH IRA, YOU CAN WITHDRAW THE CASH AT ANY TIME, FOR ANY REASON, AND THERE ARE NO PENALTIES OR TAXES THAT WILL BE ASSESSED. THE NEXT NEW ACCOUNT IS THE

RETIREMENT SAVINGS ACCOUNT
– $7,500 PER YEAR, PER PERSON
– CASH GROWS TAX-FREE FOREVER
– WITHDRAWAL AFTER AGE 58 PENALTY/TAX FREE
– REPLACES ROTH IRA

ILYCE: RETIREMENT SAVINGS ACCOUNTS. IN THESE YOU COULD ALSO DEPOSIT UP TO $7,500 PER PERSON, PER YEAR. UNLIKE CONVENTIONAL IRA CONTRIBUTIONS, THERE ARE NO TAX DEDUCTIONS UP FRONT, BUT THE MONEY INSIDE THE ACCOUNT WILL GROW TAX-FREE FOREVER. ONCE YOU TURN 58, YOU CAN WITHDRAW THE CASH TAX AND PENALTY FREE AND USE IT TO PAY FOR YOUR RETIREMENT. THESE ACCOUNTS ARE DESIGNED TO REPLACE ROTH IRAS.

AND LIKE THE LIFETIME SAVINGS ACCOUNTS, EVERYONE CAN PARTICIPATE REGARDLESS OF INCOME. FINALLY, BUSH HAS PROPOSED INCREASING THE LIMITS OF HOW MUCH YOU CAN CONTRIBUTE TO A 529 COLLEGE SAVINGS PLANS

529 COLLEGE SAVINGS PLAN
– CONTRIBUTIONS RAISED TO $55,000 FIRST YEAR
– $11,000 EACH YEAR, PER PARENT
– WITHDRAWALS TAX FREE FOR TUITION AND EXPENSES

ILYCE: UNDER PRESIDENT BUSH’S PLAN, YOU CAN CONTRIBUTE $55,000 IN THE FIRST YEAR, AND UP TO $11,000 PER YEAR, PER PARENT AFTER THAT. THE WITHDRAWALS WILL BE TAX FREE AS LONG AS YOU’RE PAYING FOR TUITION AND LIVING EXPENSES.

ALTHOUGH OUR SAVINGS RATE WENT UP IN THE FOURTH QUARTER OF LAST YEAR, WE’RE NOT SAVING MUCH NOW. BUT THESE ACCOUNTS, IN WHICH THE CASH WILL GROW TAX FREE FOREVER, GIVE YOU AS GOOD A REASON AS ANY TO SAVE LIKE CRAZY. HOW ARE YOU GOING TO FIND THE CASH TO SAVE SO MUCH MONEY?

MONEY-SAVING TIP: KICK A BAD HABIT

ILYCE: MY MONEY-SAVING TIP THIS WEEK IS TO KICK A BAD HABIT. BAD HABITS TEND TO BE EXPENSIVE — THE CUP OF OVERPRICED GOURMET COFFEE YOU HAVE TO HAVE EVERY AFTERNOON COULD EASILY COST YOU 1,000 BUCKS PER YEAR.

HOW MUCH DO BAD HABITS COST?

SMOKING (PER PACK)
$4/DAY
$1,456/YEAR

WEEKLY DRINK
$40/WEEK
$2,000/YEAR

CABLE TV
$60/MONTH
$720/YEAR

ILYCE: HOW MUCH DOES YOUR BAD HABIT COST? SMOKING A PACK A DAY COULD COST 4 BUCKS A DAY OR MORE THAN 1400 DOLLARS A YEAR. A WEEKLY DRINK NIGHT WITH THE GUYS COULD RUN $40 A WEEK, OR OVER 2000 BUCKS A YEAR. CABLE TV RUNS $60 A MONTH, OR $720 PER YEAR, AND IT’S EASY TO DRINK AWAY MORE THAN A THOUSAND DOLLARS A YEAR ON GOURMET COFFEE.

ILYCE: SO KICK A BAD HABIT — JUST ONE — AND SAVE BIG — AND THEN SAVE THE MONEY IN YOUR ROTH IRA, OR ONE OF THESE NEW SAVINGS PLANS, IF THEY PASS. TUNE IN NEXT WEEK FOR ANOTHER ONE OF MY MONEY-SAVING TIPS. OR, VISIT WGNTV.COM/GLINK OR THINKGLINK.COM FOR MORE INFORMATION.

Feb. 18, 2003.