The two new types of tax-exempt investment accounts proposed by President Bush sound just great, but it could be months before Congress decides whether to go along.

What should investors do in the meantime?

Bush has proposed a new Lifetime Savings Account that would work a lot like today’s Roth. There’d be no tax deduction on contributions, and no income or capital gains tax on withdrawals. Anyone, regardless of income, could put $7,500 a year into these accounts. Investors would be allowed to withdraw money tax-free at any time for any purpose.

He’s also proposed a Retirement Savings Account. This would work much like the Lifetime Savings account, but there would be a penalty on withdrawals before age 58. Again, anyone could contribute as much as $7,500 a year and withdrawals would be tax-free.

Figuring what kind of account will pay off for you depends on lots of assumptions about investment returns, your tax bracket now and in the future, and so on.

But as a rule of thumb, it’s probably going to continue to be smart to first put all you can into any account that gives you an up-front tax deduction, such as a traditional IRA and a 401(k). There’s no question you should at least put enough money into a 401(k) to get the maximum matching contribution made by your employer.

Up-front deductions on contributions mean you have more to invest. If you put, say, $10,000 into a 401(k) this year, you might save $3,000 on federal income tax. Invest that in an ordinary taxable account and you’ll supercharge your results, even though all your withdrawals eventually will be taxable. Given that benefit, passing up a 401(k) to hoard money for one of the proposed accounts probably doesn’t make sense.

If you’re eligible to contribute to a Roth this year, you might as well go ahead with that, too. The Roth and the new accounts all shield investment gains from taxes, and Bush wants investors to be able to convert Roths into one of the new accounts.

The issue is trickier if you’re comparing the Bush proposals to something like a traditional IRA that does not offer a tax deduction on contributions. Without that up-front benefit, you wouldn’t want to put money into an IRA and owe tax on future gains if you could use one of the proposed accounts and enjoy tax-free gains.

On the other hand, the new accounts may never exist, and if they do you’ll probably be allowed to convert IRA holdings into one of the new accounts, though you’d have to pay income tax on any gains realized in the meantime.

It’s confusing. My instinct is to hold off making a 2002 IRA contribution until the April 15 deadline to see how things develop. Since you have until mid-April 2004 to make your 2003 contribution, you might wait on this as well. A few months’ delay won’t make much difference in the long run.

What if you’re thinking of putting money into a Coverdell Education Savings Account or a state-sponsored 529 plan? These plans allow tax-free withdrawals for education expenses, just as would the proposed Lifetime Savings Account.

If you see something appealing for a Coverdell or 529 plan, invest in it. You’d probably be allowed to convert to the LSA, which would be more flexible.