Tax Cut for Savers

The Roth IRA isn't just for retirement. Here's how it can help you save for a home and for college

Sometime this week President Bill Clinton is expected to sign a sweeping IRS-reform bill that includes "technical corrections" governing the popular Roth IRA. Mostly, the corrections close loopholes. So don't look for any big changes, like expanding eligibility for those earning more than $100,000 a year. As I've argued before, that low limit unfairly precludes many nonwealthy couples in big cities from converting their old IRAs to a Roth. Still, nagging obstacles are about to get obliterated, opening the door for wider use of this powerful savings tool.

The Roth is, of course, the now familiar IRA that allows savers to...

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