Shares of publicly traded financial services providers rallied yesterday after President Bush sealed his second electoral victory and raised hopes for favorable changes in taxes to remain in place and, potentially, the privatization of Social Security, The Wall Street Journal reports. In his second term, Bush may follow through on earlier discussions to overhaul the current retirement savings industry by replacing popular defined contribution plans, like the individual retirement account and 401(k) plan, with other types of investment vehicles. During his previous administration, the president also raised the possibility of privatizing Social Security. Bush's victory also derails John Kerry's campaign proposals to withdraw tax breaks on capital gains and dividends. In what is perceived to be an investor-friendly administration, financial service providers have renewed hopes of seeing of Lifetime Savings Accounts come to life. These LSAs would potentially accept $5,000 per year of tax-deferred savings and provide withdraws for a wide variety of purposes.
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