The president’s proposed savings plan ignores basic human behavior.

People hoping to save for long-term goals like college or retirement must currently navigate an alphabet soup of options – 401(k), 403(b), 529, traditional IRA, Roth IRA.

Some of these plans are tax deferred, meaning you pay tax when you use the money. Some are tax-free. All place some sort of restriction on how and when you can access your money without incurring significant taxes and penalties. These complications are sometimes cited as one reason why people aren’t saving enough.

As a society Americans tend to spend first and save later. That may be OK now, but it’s generating a huge bill that down the road someone is going to have to pay.

It was that problem that the Bush administration had in mind when it unveiled a raft of new tax free saving programs in the State of the Union. The goal is to simplify tax advantaged savings options, thereby encouraging more people to save.

Those are both important goals, and critical to the long-term financial health of our country and our citizens. But will these plans do the trick?

Bush’s proposal would introduce three new programs to consolidate savings options. The Lifetime Savings Account would allow investors to invest up to $7,500 a year. Savings wouldn’t be tax deductible, but earnings would grow tax-free and could be withdrawn any time without penalty.

The Retirement Savings Account would consolidate individual retirement and Roth accounts currently available. As with the LSA accounts, savings up to $7,500 plus $7,500 for a spouse wouldn’t be tax deductible. After the age of 58, withdrawals would be tax and penalty free.

Employer Retirement Savings Accounts are the Bush plan’s answer to current employer sponsored plans like the 401(k). Just like now, ERSA contributions would be tax deductible and earnings wouldn’t be taxed until you withdraw the money.

On the surface, this plan is very appealing, and people with high incomes who have a lot to invest might be better off. But the reality is that under the Bush proposal most middle and lower income families would probably save less, not more, than they currently can manage. The reasons are many.

First of all, the tax deduction that comes with IRA contributions would go away. Taking away that deduction would make saving more expensive, and one of the most basic economic laws is that if something is more expensive people do less of it.

Second, it is likely that under the Bush proposal many small or private businesses would have less of an incentive to offer retirement plans to their employees. If business owners had the option of investing tax-free through an RSA, why go through the hassle and expense of having a plan for employees? Large companies would most likely offer ERSA plans, but most Americans (especially here in Maine) work for small companies.

Many economists think that 401(k)s and other plans drive up savings because the money is taken out of a worker’s paycheck pre-tax. If you never see it, you can’t spend it. Take away that pre-tax option for the majority of Americans and the savings rate would sag.

The beauty of tax deferred or tax-free saving is that it allows your money to take more advantage of compound interest. That takes time under normal market conditions, lots of time. Giving savers the option of getting at their money anytime they want will mean that many people won’t keep the money long enough to enjoy the true benefits of saving, which takes time to accumulate.

It’s hard to fault the logic of the Bush plan, but it ignores some basic principles of human behavior. As a society, we enjoy spending more than saving, and most middle and lower income Americans simply don’t have enough left over at the end of the month to take real advantage of the proposed savings accounts.

So for now the jury is out. My advice is for people to look for ways to save no matter what is going on in Washington. There are no shortcuts, but there are things investors can do today to get started. Cut spending, set up an automatic debit from your checking account into a savings or investment account.

And, above all, start today.

Peter J. Fendler is vice president and co-owner of Norton Financial Services of South Portland, Auburn and Brunswick.