Contact: Laura Kouri

(816) 340-4710

(816) 340-7033

KANSAS CITY, Mo., July 14, 2000 – As members of the House of Representatives prepare to vote on Individual Retirement Account expansion legislation, a new survey by American Century Investments shows most Americans would support an increase of annual IRA contribution limits from $2,000 to $5,000. Furthermore, the study suggests that the change in allowable contribution levels would spur more retirement investment.

The "American Century IRA Expansion Study" results are based on responses from more than 1,000 adults across the country. The research was part of ORC International’s weekly CARAVAN telephone survey.

According to the research, three-fourths (76%) of Americans believe Congressional representatives should support legislation expanding the limits from $2,000 to $5,000. Support for the change is much higher among people who’ve graduated from college (87%) and those under the age 65 years (79%).

"This study shows that there is widespread support for IRA expansion," said Doug Lockwood, American Century’s director of education and guidance. "While the IRA has been improved and modified at various times during its history, the $2,000 annual contribution limit has been in place almost 20 years. This move by the House of Representatives would be a giant step toward updating the venerable IRA as a viable retirement savings vehicle for the new millennium," he said.

When asked about how the change in contribution limits would impact the attractiveness of the IRA, two-thirds (67%) of respondents indicated it would make the IRA a "more appealing" retirement investment. Again, Americans between the ages of 35 and 64 found the increase "more appealing" (73%) than the average respondent, as did college graduates (79%) and individuals with household incomes of $50,000 or more.

- more -

Page 2/IRA Expansion

"It’s interesting that those earning $50,000 or more see the change in contribution limits as something that would increase the IRA’s appeal since the deductibility of contributions is really a tax benefit for individuals with adjusted gross incomes below $42,000 a year," Lockwood said. "It just goes to show that tax-deferred growth, in and of itself, is a compelling enough reason for higher-income workers to establish IRAs."

According to the research, 41% of all Americans would "save more" for retirement if the limits increased – either by contributing to an IRA for the first time (18%) or contributing more to an existing account (24%). Interestingly, an almost equal percentage of respondents (39%) who currently don’t have IRAs, would not be enticed to save.

One-third (31%) of those who would either "open an IRA or contribute more to an existing IRA" would contribute the full $5,000. Pre-retirees (ages 45 to 64) are more likely than younger people to contribute the full $5,000 (43%), as are college graduates (39%) and individuals with household incomes of $50,000 or more (48%).

The 1,017 phone interviews for the "American Century IRA Expansion Study" were conducted the last week of May 2000 by ORC International as part of its CARAVAN survey. Questions were posed to a national probability sample of individuals 18 years of age or older, living in private households in the continental United States.

American Century is a mutual fund, brokerage and investment services company serving nearly two million individual and institutional investors. It was recently selected as one of FORTUNE Magazine’s 100 Best Companies to Work for in America. Through its broad selection of more than 70 mutual funds, the Kansas City, Missouri-based company manages more than $110 billion in assets. James E. Stowers Jr. founded the company in 1958 and serves as chairman. His son, James E. Stowers III, is chief executive officer and William M. Lyons is president and chief operating officer. For more information on company products and services, visit its Website at www.americancentury.com.

# # #