Lifetime Savings Account Act of 2005

The Lifetime Savings Account Act of 2005 proposed the creation of a new type of tax-exempt savings vehicle called a Lifetime Savings Account (LSA). Under this bill, any individual could contribute up to $5,000 in cash annually to an LSA, regardless of their age or income level.

The primary impact on citizens would be the ability to withdraw funds from these accounts at any time and for any purpose—such as buying a home, paying for education, or emergency expenses—without paying taxes on the investment growth or penalties for early withdrawal. Additionally, the bill allowed for tax-free transfers from existing education savings accounts and qualified state tuition plans into these new accounts for a limited time.