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Judith and Howard Cohen started pumping money into individual retirement accounts almost as soon as IRAs were created.

IRAs are 30 years old, the Cohens are twice that age, and steady saving has made retirement a possibility for them.

"IRAs made perfect sense to us," said Judith Cohen. "It was money to be put away that we would not use at all, and it was tax-deferred, which was yummy to me."

Judith Cohen, 60, and husband Howard, 62, are not about to shut down International Records, the Peachtree Center music store they have owned and operated since 1984. But their steady saving and investing program has made it possible. "This is the bulk of what will keep us going," Judith Cohen said. "Social Security is barely there."

They are not alone. An estimated 45.2 million households owned IRAs at mid-2003, according to the Investment Company Institute, a mutual fund trade association. That's about 40 percent of all U.S. households.

Total assets in IRAs came to $2.98 trillion at that time, the institute estimates. Annual growth in IRA accounts may be several hundred billion dollars, at a very rough estimate.

IRAs were established in the Employee Retirement Income Security Act of 1974. The idea was to provide some sort of savings vehicle for people who had no pensions.

Similar tax-favored plans for self-employed people have been established before and since. The Roth IRA, which has deferred and potentially very valuable tax benefits, came along in 1997.

IRAs remain popular because of the tax benefits and because they provide a way to save for the future, said Dave Polstra, chairman of wealth management company Polstra & Dardaman.

"A third reason is that IRAs have a built-in incentive to leave them alone," said Polstra. "The incentive is a 10 percent penalty if you pull the money out too early or for the wrong reasons."

A recently developing reason is the rollover phenomenon. Let's say you have a 401(k) retirement plan at work and you leave that employer. You could leave the savings in that account. But many people roll those savings over into an IRA, where they have more investment choices as well as more flexibility in estate planning.

The Cohens are in the process of rolling over their pension and profit-sharing assets into IRAs.

Yet another reason is self-reliance. "In the old days, the 1980s and early 1990s, we talked about the three-legged stool — Social Security, a company pension and your own savings," said Polstra.

But Social Security appears to be wobbly, and pensions are becoming less common, especially for younger workers. "That remaining leg has gotten a lot more important," Polstra said.

For all those reasons, IRAs, 401(k)s and other worker-based retirement plans are becoming more attractive and perhaps more essential. In turn, politicians continue to jigger with the system.

The Roth IRA is one example, and another is the recent increases in maximum annual contributions to IRAs. Now President Bush has introduced the idea of retirement savings accounts, which would replace several kinds of IRAs and increase the annual contribution limit. Bush has raised that idea for two years, but so far not much movement has been seen in Congress.

Are RSAs a good idea? The arguments are complex. One is the rich man-poor man question of who really gets the goodies. Another circles around how new tax deductions would affect the government's income, now and in the future.

A third asks whether the rules on withdrawals would make it too easy to yank the money back out long before retirement. There's at least one other question: Would RSAs turn out to be another excuse for corporations to dump their pension plans?

Such uncertainties are not a problem for individual investors, the experts say. "The IRA money is not going anywhere," said Ed Slott, publisher of a newsletter written primarily to explain matters to money managers. "The RSAs will just offer new choices and chances to convert existing money."

He is enthusiastic about the RSA concept. "They would be a totally tax-free way to invest," Slott said. "You could really stuff a lot more money in. These would be like Roths on steroids."

For a quick desciption at the IRAs and RSAs now on the market, click here.

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