EBRI Notes

"IRAs: It's a Whole New Ballgame" and "Sources of Health Insurance Coverage Among Part-Time Workers"

Sep 1, 1997 16  pages


IRAs: It's a Whole New Ballgame—With the recently enacted Taxpayer Relief Act of 1997 ("TRA '97") (H.R. 2014), the landscape of individual retirement accounts (IRAs) has changed dramatically. In fact, the term "retirement" has become somewhat misleading because IRAs can now be used to fund first-time home purchase and college expenses without incurring the 10 percent penalty tax currently applied to distributions made to individuals younger than age 591/2. TRA '97 expanded eligibility for currently existing deductible IRAs and allowed the accumulated funds to be used for purposes other than retirement without penalty. It also created a new, nondeductible IRA -- the Roth IRA, which can also be used to save for retirement, first-time home purchase, and college expenses. More individuals will be eligible for the Roth IRA than for deductible IRAs. Finally, TRA '97 created a nondeductible education IRA.

Sources of Health Insurance Coverage Among Part-Time Workers—Employee Benefit Research Institute (EBRI) tabulations of the March 1996 Current Population Survey (CPS) reveal that 21.3 percent of the total work force, consisting of 29.6 million individuals ages 16 and older, were part-time workers in 1995. In comparison, 78.6 percent of all workers, or 109.3 million individuals ages 16 and older, were full-time workers in 1995.

The definition of part-time work has changed over time. As of March 1994, the Bureau of Labor Statistics (BLS) classifies full- and part-time workers based solely on the number of hours usually worked. Using this definition, part-time workers are those who work between 1 and 34 hours per week. Full-time workers are those who work 35 hours or more per week. As a result of the refinements in the March 1995 CPS, data for 1994 and later years are not directly comparable with those from 1993 and earlier years.