Chicago Tribune from Chicago, Illinois • 39

Chicago Tribune, Thursday, March 1, 1984 Section 3 -3 Outlook Money management IR As more flexible than you may think rilfl William I Donoahue Us I wy .1 ill 1 BY THIS TIME, you've probably been subjected to hundreds of ads from the financial industry coaxing, begging and pleading you to open up an individual retirement account. You've also probably heard a lot in the local media about IRAs; articles about IRAs spring up around this time of year like flowers do in May. But some IRA facts might open the eyes of even the most jaded personal finance reader. An IRA is a self-directed retirement account. Whatever money you put into an IRA and whatever money you earn on your IRA investment is not taxed until you begin to draw on it.

You can contribute $2,000 of employment income a year to an individual account and $2,250 a year, to a joint spousal account if only one spouse has employment income. Working couples can put away up to $4,000 a year, and anyone can deduct the yearly IRA contribution from taxable income for that year. In the past you had until the time you filea your tax return to make contributions to your IRA, and you could still deduct it from your taxable income on your return. But the Internal Revenue Service has changed all that. Now you can claim a deduction for an IRA contribution on your 1983 tax return that you intend to make but haven't yet made.

The stipulation is that you make the contribution before April fcrtmwmiafinniii iiiti'Iti UmimninT fflrr rawiili finir n. i mm 1 AP Laserpholo Holding the line Vice President George Bush meets with Secretary of sentative William Brock in the White House Agriculture John Block left and U.S. Trade Repre- clay. Bush headed the meeting on trade with Japan. Pay TV Recovery 'creating' 50,000 jobs By William Gruber ABOUT 50,000 NEW jobs will be created this year as the Chicago area continues its economic recovery, according to an economist for Citibank of New York.

The area should see a jobs turnaround and a gain of about 1.6 percent in employment in 1984, after declines averaging 1.7 percent annually over the last four years, said Rosemary Kinder, the bank's Midwest regional economist who prepared the quarterly report. "After a weak 1983, look for relatively strong gains in economic activity in Chicago for 1984," she said in the report, which was presented to about 100 corporate customers of the New York bank at a conference here this week. In an interview, Renner predicted the financial and service industries will account for most of the employment gain, with a jump of 40,000 people this year. She predicted these groups would grow 3 percent annually over the next few years. "There also will be some boun-ceback in the manufacturing sector despite continuing long-term problems," she said.

"Those won't go away, but such companies as machine tools and smaller firms rebuilding their production lines will get some cyclical rebound." RETAIL EMPLOYMENT should also show some gains, she said. Although sales picked up last year, Renner said, most retailers avoided increasing their staffs in order to bolster profits. The projected 1.6 percent increase in projected jobs in this area will lag behind the anticipated improvement in many other areas of the nation, however, she said. Citibank economists predict average employment will rise 9.5 percent in Phoenix, 7.4 percent in Houston, 6 percent in Dallas, 5.4 percent in Miami, 4.2 percent in Los Angeles and Boston, 3.4 percent in San Francisco and 2. percent in New York and Philadelphia.

But they expect Milwaukee, Detroit and St. Louis to show smaller gains than Chicago. The report, however, said certain key industrial groups will continue to see excess capacity in 1984. It also predicted that foreign competition will remain a problem for some industries because "the tech-. nology involved in much of the manufacturing specialties of the Midwest is relatively easy to duplicate and indeed to improve upon." ON TV pushes rival out of picture Buyout will channel new programs to Spectrum subscribers ho later than" the tax year in which" you reach the age of 70'4.

If you fail to do so, you'll be slapped with a stiff penalty. HOW STIFF? According to th IRS, you'll get hit for 50 percent of the amount of money. you should have taken out but didn't. The IRS figures this amount by a complex formula based on actuarial tables. For example, if the IRS thinks you should have withdrawn one-twentieth of your IRA, it will hit you for 50 percent of that amount.

If you withdraw IRA money before age 59, the IRS will hit you for a 10 percent penalty on the amount withdrawn. You can, however, temporarily withdraw all or part of the assets in your IRA without penalty. The catch' is that you must put the money back into an IRA within 60 days. If you don't, the distribution will be as an early withdrawal and you'll Defined the 10 percent. If you replace some but not all of the amount you withdrew, only the amount you don't put back after 60 days will be hit for the 10 percent penalty.

Also, if you make a tempo-, rary withdrawal, you must wait 12 months before making another. Any interest or dividends you earn on the money from a temporary withdrawal must be included in your gross in come when you file your tax return for the year it was received. DESPITE THE many catches, the 60-day withdrawal period gives you the flexibility to investigate alternative IRAs if you are not satisfied with the one you have. It also pro- vides you with a pool of funds to tap in an emergency. Finally, keep in mind that you're not limited to only one IRA.

You can mix and match your IRA investments. For example, you might want to keep a portion of your IRA in the stock market and put another portion in, say, a bond fund or a money: fund. You might also want to keep another portion in an ultrasafe federally insured bank money market deposit account. THE IRS APPARENTLY made the rule change to encourage taxpayers to file their returns early. You can file your return tomorrow claiming an IRA contribution, but hold offuntil April 16 before making the contribution.

In fact, if you file early and receive a tax refund before April 16, you can use the refund to fund vour IRA contribution for 1983. And if you don't have an IRA, you can file now claiming you will open one by April 16. The tax-filing deadline this year is April 16 because the 15th falls on a Sunday. If you fail to make your promised contribution before April 16, however, the IRS will charge additional taxes and penalties. The rule change, however, does not apply to Keogn plans, the IRAs for the self-ernployed.

There are some other rules governing IRAs that are often overlooked. For instance, you may begin taking distributions from your IRA after you reach the age of 59Ms, but you must begin taking distributions By Charles Storch ON TV HAS finally knocked off TV the last of its subscription television rivals in the Chicago area. On Thursday, area subscribers of Spectrum, the subscription TV STV service owned ty United Cable Television will receive ON TV programs. The change results from the sale earlier this week of Spectrum's subscriber base here to ON TV's parent, Oak Industries Inc. of Rancho Bernardo, Calif.

James Weisberg, Spectrum vice president and general manager in Chicago, said Wednesday that Spectrum will shut its operations over the next few months. Spectrum employs 50 people here. STV is a pay television service, usually single-channel, broadcasting scrambled signals to TV sets equipped with special decoders. The STV industry has been rocked by the recession and competition from multichannel cable TV, and several STV systems around the country have closed or been sold. LAST YEAR Oak closed STV systems in Dallas-Ft.

Worth and Phoenix, and Denver-based United Cable put up for sale its STV systems in Chicago, Minneapolis and Cincinnati. The STV field here was narrowed to two in November when ON TV bought the money-losing SportsVision STV operation. SportsVision is also seen on area cable TV systems. Spectrum, which has been here since late 1981, has about 28,000 subscribers, down from its peak of about 50,000 in 1982. ON TV, here since 1980, has about 84,000 subscribers, down from a peak of about 125,000 in 1983.

Oak said its payment to United Cable will be based on how many Spectrum subscribers stick with ON TV over the next three years. Oak will pay $26 for each Spectrum subscriber retained in the first year, $25.60 per subscriber in the second year and $12.80 per subscriber in the third year. OAK SAID Spectrum subscribers will continue to pay $22.95 a month, the same rate charged ON TV's renewing subscribers. ON TV recently raised its rate for new customers to $24.95, and that rate is expected to cover all viewers by May. Spectrum has broadcast 20 hours a day over Channel 66.

ON TV broadcasts 24 hours a day over Channel 44. A temporary arrangement allows Spectrum subscribers to receive ON TV programs, but only for 20 hours a day. Full service requires an ON TV decoder. Spectrum said it will swap its decoders for ON TV's, at no cost to continuing subscribers. I got more ow the CORONA PC i I stacks up against IBM.

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