IDS LIFE SPECIAL INCOME FUND INC, 485APOS, 1996-02-06

IDS LIFE SPECIAL INCOME FUND INC
485APOS, 1996-02-06

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<PAGE>
PAGE 1
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549-1004

Form N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

Post-Effective Amendment No. 30 (File No. 2-73113) X

and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY
ACT OF l940

Amendment No. 32 (File No. 811-3219) X

IDS LIFE SPECIAL INCOME FUND, INC.
IDS Tower 10, Minneapolis, MN 55440-0010 (612) 330-9283
Leslie L. Ogg - 901 S. Marquette Ave., Suite 2810, Minneapolis, MN
55402-3268

Approximate Date of Proposed Public Offering:

It is proposed that this filing will become effective (check
appropriate box)
_____immediately upon filing pursuant to paragraph (b)
on (date) pursuant to paragraph (b)
_____60 days after filing pursuant to paragraph (a)(i)
on (date) pursuant to paragraph (a)(i)
_____75 days after filing pursuant to paragraph (a)(ii)
X on April 30, 1996 pursuant to paragraph (a)(ii) of rule 485

If appropriate, check the following box:
_____This post-effective amendment designates a new effective date
for a previously filed post-effective amendment.

Registrant has registered an indefinite number or amount of
securities under the Securities Act of 1933 pursuant to Section
24(f) of the Investment Company Act of 1940. Registrant filed its
24f-2 Notice for the fiscal year ended Aug. 31, 1995, on or about
Oct. 31, 1995.
<PAGE>
PAGE 2
CROSS REFERENCE SHEET

Cross reference sheet for the Retirement Annuity Mutual Funds
showing the location in the prospectus and Statement of Additional
Information of the information called for by the items enumerated
in Parts A and B of Form N-1A.

Negative answers omitted from prospectus are so indicated.
<TABLE><CAPTION>
PART A

Item No. Location in Prospectus
<S> <C>
1 Cover page of prospectus

2 The funds in brief; Sales charge and expenses

3(a) Performance
(b) NA
(c) Performance
(d) Performance

4(a) The fund in brief; Investment policies and risk; How the funds are organized
(b) Investment policies and risk
(c) Investment policies and risk

5(a) How the funds are organized
(b) How the funds are organized; About AEFC
(b)(i) About AEFC
(b)(ii) Investment manager
(b)(iii) Investment manager
(c) Portfolio managers
(d) The funds in brief
(e) How the funds are organized: Investment manager
(f) NA
(g) How the funds are organized: Investment manager

5A(a) *
(b) *

6(a) How the funds are organized: Shares; Voting rights
(b) NA
(c) NA
(d) NA
(e) Cover page
(f) Distribution and taxes: Dividends and capital gain distributions
(g) Distribution and taxes: Taxes
(h) NA

7(a) NA
(b) Performance: Key terms; Investment policies and their risks: Valuing assets
(c) NA
(d) NA
(e) NA
(f) NA

8(a) NA
(b) NA
(c) NA
(d) NA

9 None
<PAGE>
PAGE 3
PART B

Item No. Location in Statement of Additional Information

10 Cover page of SAI

11 Table of contents

12 NA

13(a) Additional investment policies; All appendices except Dollar Cost Averaging
(b) Additional investment policies
(c) "Unless changed by the board of directors..." in Additional Investment Policies
(d) Portfolio Turnover, last 2 paragraphs of Portfolio Transactions

14(a) Directors and officers of the fund**; Directors and officers
(b) Directors and officers
(c) Directors and officers (last paragraph)

15(a) NA
(b) NA
(c) Directors and Officers** (last paragraph)

16(a)(i) How the fund is organized**; About IDS Life and AEFC**
(a)(ii) Agreements with IDS Life and AEFC
(a)(iii) Agreements with IDS Life and AEFC
(b) Agreements with IDS Life and AEFC
(c) NA
(d) None
(e) NA
(f) NA
(g) NA
(h) Custodian; Independent Auditors
(i) Custodian

17(a) Portfolio Transactions
(b) Brokerage Commissions Paid to Brokers Affiliated with IDS Life
(c) Portfolio Transactions
(d) Portfolio Transactions
(e) Portfolio Transactions

18(a) How the fund is organized: Shares and Voting rights**
(b) NA

19(a) Investing in the Funds
(b) Valuing Fund Shares; Investing in the Funds
(c) NA

20 Taxes

21(a) NA
(b) NA
(c) NA

22(a) Performance Information: Calculation of Yield
(b) Performance Information: Calculation of Total Return and/or Yield

23 NA

*Designates information is located in annual report.
**Designates location in the prospectus, which is hereby incorporated by reference in the Statement of Additional Information.
</TABLE>
<PAGE>
PAGE 4

Retirement Annuity Mutual Funds
Prospectus/April 30, 1996

This prospectus describes nine Funds that receive payments from the
variable accounts of your variable annuity contract. Each of these
Funds has different investment objectives and policies.

IDS Life Capital Resource Fund is a stock fund.

IDS Life Special Income Fund is a bond fund.

IDS Life Managed Fund is a managed fund.

IDS Life Moneyshare Fund is a money market fund. An investment in
Moneyshare Fund is neither insured nor guaranteed by the U.S.
government and there can be no assurance that the Fund will be able
to maintain a stable net asset value of $1 per share.

IDS Life International Equity Fund is an international stock fund.

IDS Life Aggressive Growth Fund is a stock fund investing primarily
in common stocks of small and medium-size companies.

IDS Life Growth Dimensions Fund is a stock fund.

IDS Life Global Yield Fund is a bond fund.

IDS life Income Advantage Fund is a bond fund.

This prospectus contains facts that can help you decide if the
Funds are the right investment for you. Read this along with your
variable annuity prospectus before you invest and keep both
prospectuses for future reference.

Additional facts about the Funds are in a Statement of Additional
Information (SAI), filed with the Securities and Exchange
Commission. The SAI, dated April 30, 1996, is incorporated here by
reference. For a free copy, contact IDS Life Insurance Company
(IDS Life).

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.

IDS LIFE IS NOT A FINANCIAL INSTITUTION, AND THE SECURITIES IT
OFFERS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, ANY FINANCIAL INSTITUTION, NOR ARE THEY INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD,
OR ANY OTHER AGENCY.

<PAGE>
PAGE 5

IDS Life Investment Series, Inc.
IDS Life Capital Resource Fund
IDS Life International Equity Fund
IDS Life Aggressive Growth Fund
IDS Life Growth Dimensions Fund
IDS Life Special Income Fund, Inc.
IDS Life Special Income Fund
IDS Life Global Yield Fund
IDS Life Income Advantage Fund
IDS Life Moneyshare Fund, Inc.
IDS Life Managed Fund, Inc.

Retirement Annuity Mutual Funds
IDS Tower 10
Minneapolis, MN 55440-0010
612-671-3733
TTY: 800-285-8846
<PAGE>
PAGE 6
Table of contents

The Funds in brief
Goals and types of Fund investments
Manager and distributor
Variable accounts

Sales charge and expenses
Sales charge
Expenses

Performance
Financial highlights
Total returns
Yield calculation
Key terms

Investment policies and risk
Facts about investments and their risks
Alternative investment options
Valuing assets

How to invest, transfer or redeem shares
How to invest
How to transfer among variable accounts
Redeeming shares

Distributions and taxes
Dividend and capital gain distributions
Taxes

How the Funds are organized
Shares
Voting rights
Shareholder meetings
Portfolio managers
Directors and officers
Investment manager
Administrative services agreement
Investment advisory agreements

About American Express Financial Corporation
General information

The Funds in brief

Goals and types of Fund investments

Capital Resource Fund's goal is capital appreciation, and it
invests primarily in U.S. common stocks.

Special Income Fund's goal is to provide a high level of current
income while conserving the value of the investment for the longest
period of time. It invests primarily in investment-grade bonds.
<PAGE>
PAGE 7
Managed Fund's goal is maximum total investment return through a
combination of capital growth and current income. It invests
primarily in stocks, convertible securities, bonds and money market
instruments.

Moneyshare Fund's goal is to provide maximum current income
consistent with liquidity and conservation of capital. It invests
in money market securities.

International Equity Fund's goal is capital appreciation, and it
invests primarily in common stocks of foreign issuers.

Aggressive Growth Fund's goal is capital appreciation, and it
invests primarily in common stocks of small and medium-size
companies.

Growth Dimensions Fund's goal is long-term growth of capital, and
it invests primarily in common stocks of U.S. and foreign companies
showing potential for significant growth.

Global Yield Fund's goal is high total return through income and
growth of capital, and it invests primarily in debt securities of
U.S. and foreign issuers.

Income Advantage Fund's goal is to provide high current income as
its primary goal and capital growth as its secondary goal, and it
invests primarily in long-term, high-yielding, high risk debt
securities below investment grade issued by U.S. and foreign
corporations.

Because any investment involves risk, achieving these goals cannot
be guaranteed. Only the contract owners can change the goals. See
"Voting rights."

Manager and distributor

The Funds are managed by IDS Life, a subsidiary of American Express
Financial Corporation (AEFC). AEFC has an agreement with IDS Life
to furnish investment advice for the Funds managed by IDS Life.

Variable accounts

You may not buy (nor will you own) shares of the Fund directly.
You invest by buying a variable annuity and allocating your
purchase payments among the variable accounts that invest in the
Funds.

Sales charge and expenses

Sales charge

There is no sales charge for the sale or redemption of fund shares,
but there may be charges associated with your redemption (surrender
or withdrawal) of your annuity contract. Any charges that apply to
the variable accounts and your annuity contract are described in
the variable annuity prospectus.
<PAGE>
PAGE 8
Expenses

The Funds pay IDS Life a fee for managing their investment
portfolios. The Funds pay AEFC for administrative and accounting
services. The Funds also pay certain nonadvisory expense. See
"Investment manager" and "Administrative services agreement" under
"How the funds are organized."

Performance

Financial highlights

<TABLE>
<CAPTION>
Capital Resouce Fund
Financial highlights

Fiscal year ended August 31,

Per share income and capital changes*

1995 1994 1993 1992 1991 1990 1989 1988 1987 1986
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of year $23.43 $24.58 $23.90 $23.15 $17.54 $20.17 $15.06 $17.71 $15.97 $14.71

Income (loss) from investment operations:
Net investment income .29 .29 .23 .21 .40 .52 .39 .31 .52 .61

Net gains (losses) on securities (both realized
and unrealized) 3.70 1.56 1.89 1.75 6.61 (2.06) 5.38 (2.54) 4.23 2.87

Total from investment operations 3.99 1.85 2.12 1.96 7.01 (1.54) 5.77 (2.23) 4.75 3.48

Less distributions:
Dividends from net investment income (.29) (.29) (.23) (.21) (.40) (.52) (.39) (.31) (.52) (.61)

Distributions from realized gains (2.71) (2.71) (1.21) (1.00) (1.00) (.57) (.27) (.11) (2.49) (1.61)

Total distributions (3.00) (3.00) (1.44) (1.21) (1.40) (1.09) (.66) (.42) (3.01) (2.22)

Net asset value, end of year $24.42 $23.43 $24.58 $23.90 $23.15 $17.54 $20.17 $15.06 $17.71 $15.97

Ratios/supplemental data
1995 1994 1993 1992 1991 1990 1989 1988 1987 1986
Net assets, end of year
(in millions) $3,845 $2,899 $2,308 $1,681 $1,191 $ 702 $ 660 $ 454 $ 493 $ 301

Ratio of expenses to average
daily net assets .69% .68% .68% .70% .70% .70% .73% .69% .59% .54%

Ratio of net income to average
daily net assets 1.22% 1.20% 0.94% 0.91% 1.94% 2.69% 2.22% 2.01% 2.94% 3.74%

Portfolio turnover rate
(excluding short-term
securities) 88% 85% 65% 63% 74% 82% 42% 111% 171% 115%

Total Return** 17.18% 7.61% 8.87% 8.54% 40.68% (7.79)% 38.72% (12.59)% 30.32% 23.90%

*For a share outstanding throughout the year. Rounded to the nearest cent.
**Total return does not reflect payment of the expenses that apply to the variable accounts or any annuity charges.
</TABLE>
<PAGE>
PAGE 9
<TABLE>
<CAPTION>
Special Income Fund
Financial highlights

Fiscal year ended August 31,
Per share income and capital changes*

1995 1994 1993 1992 1991 1990 1989 1988 1987 1986
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of year $11.05 $12.08 $11.26 $10.72 $10.10 $11.11 $10.88 $11.09 $11.91 $11.34
__________________________________________________________________________________________________________________________
Income (loss) from investment operations:
Net investment income .88 .84 .85 .90 .97 .99 1.03 1.03 1.08 1.16
Net gains (losses) on securities (both
realized and unrealized) .56 (.99) .82 .54 .62 (1.01) .23 (.21) (.56) 1.26
___________________________________________________________________________________________________________________________
Total from investment operations 1.44 (.15) 1.67 1.44 1.59 (.02) 1.26 .82 .52 2.42
___________________________________________________________________________________________________________________________
Less distributions:
Dividends from net investment income (.87) (.85) (.85) (.90) (.97) (.99) (1.03) (1.03) (1.08) (1.16)
Distributions from realized gains (.02) (.02) - - - - - - (.26) (.69)
Excess distributions from net investment
income (.02) (.01) - - - - - - - -
___________________________________________________________________________________________________________________________
Total distributions (.91) (.88) (.85) (.90) (.97) (.99) (1.03) (1.03) (1.34) (1.85)
___________________________________________________________________________________________________________________________
Net asset value, end of period $11.58 $11.05 $12.08 $11.26 $10.72 $10.10 $11.11 $10.88 $11.09 $11.91
___________________________________________________________________________________________________________________________

Ratios/supplemental data
1995 1994 1993 1992 1991 1990 1989 1988 1987 1986
Net assets, end of year
(in millions) $1,703 $1,559 $1,551 $1,136 $ 800 $ 641 $ 565 $ 428 $ 409 $ 307
Ratio of expenses to
average daily net assets .68% .67% .69% .71% .70% .71% .73% .69% .58% .55%
Ratio of net income to
average daily net assets 8.08% 7.20% 7.41% 8.22% 9.31% 9.42% 9.37% 9.45% 9.11% 10.27%
Portfolio turnover rate
(excluding short-term
securities) 56% 57% 77% 92% 97% 118% 132% 169% 101% 170%
___________________________________________________________________________________________________________________________
Total Return** 13.75% (1.30)% 15.47% 13.96% 16.54% (0.12)% 12.19% 7.76% 4.48% 23.17%
___________________________________________________________________________________________________________________________
*For a share outstanding throughout the period. Rounded to the nearest cent.
**Total return does not reflect payment of the expenses that apply to the variable accounts or any annuity charges.
</TABLE>
<PAGE>
PAGE 10
<TABLE>
<CAPTION>
Managed Fund
Financial highlights

Fiscal period ended August 31,
Per share income and capital changes*

1995 1994 1993 1992 1991 1990 1989 1988 1987 1986**
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $13.65 $14.32 $13.08 $12.59 $10.93 $12.08 $9.87 $11.34 $10.10 $10.00

Income (loss) from investment operations:
Net investment income .40 .47 .49 .56 .58 .65 .48 .42 .45 .16

Net gains(losses) on securities (both
realized and unrealized) 1.20 (.26) 1.60 .95 2.11 (.67) 2.25 (1.47) 1.45 .10

Total from investment operations 1.60 .21 2.09 1.51 2.69 (.02) 2.73 (1.05) 1.90 .26

Less distributions:
Dividends from net investment income (.40) (.47) (.49) (.56) (.58) (.65) (.48) (.42) (.45) (.16)

Distributions from net realized gains -- (.41) (.36) (.46) (.45) (.48) (.04) - (.21) -

Total distributions (.40) (.88) (.85) (1.02) (1.03) (1.13) (.52) (.42) (.66) (.16)

Net asset value, end of period $14.85 $13.65 $14.32 $13.08 $12.59 $10.93 $12.08 $ 9.87 $11.34 $10.10

Ratios/supplemental data
1995 1994 1993 1992 1991 1990 1989 1988 1987 1986**

Net assets, end of period (in millions) $3,044 $2,499 $1,858 $1,169 $ 810 $ 545 $ 462 $ 381 $ 340 $ 48

Ratio of expenses to average daily net
assets .68% .68% .69% .71% .70% .71% .73% .69% .67% .64%***

Ratio of net income to average
daily net assets 2.96% 3.46% 3.70% 4.35% 4.86% 5.42% 5.06% 4.42% 4.10% 4.48%***

Portfolio turnover rate (excluding
short-term securities) 72% 79% 58% 50% 52% 37% 69% 62% 48% 10%

Total Return+ 11.94% 1.51% 16.33% 12.14% 25.24% (0.23)% 28.47% (9.06)% 19.13% 2.55%

*For a share outstanding throughout the period. Rounded to the nearest cent.
**Commencement of operations. Period from April 30, 1986 to Aug. 31, 1986.
***Adjusted to an annual basis.
+Total return does not reflect payment of the expenses that apply to the variable accounts or any annuity charges.
</TABLE>
<PAGE>
PAGE 11
<TABLE>
<CAPTION>
Moneyshare Fund
Financial highlights

Fiscal year ended August 31,
Per share income and capital changes*

1995 1994 1993 1992 1991 1990 1989 1988 1987 1986
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
year $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
_________________________________________________________________________________________________________________________
Income from investment operations:
Net investment income .05 .03 .03 .04 .07 .08 .09 .07 .06 .07
_________________________________________________________________________________________________________________________
Total from investment
operations .05 .03 .03 .04 .07 .08 .09 .07 .06 .07
_________________________________________________________________________________________________________________________
Less distributions:
Dividends from net investment
income (.05) (.03) (.03) (.04) (.07) (.08) (.09) (.07) (.06) (.07)
_________________________________________________________________________________________________________________________
Net asset value, end of year $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
_________________________________________________________________________________________________________________________

Ratios/supplemental data
1995 1994 1993 1992 1991 1990 1989 1988 1987 1986
Net assets, end of year
(in millions) $ 227 $ 179 $ 180 $ 246 $ 285 $ 274 $ 160 $ 102 $ 67 $ 61
_________________________________________________________________________________________________________________________
Ratio of expenses to average
daily net assets .59% .57% .60% .60% .57% .62% .54% .58% .54% .62%
_________________________________________________________________________________________________________________________
Ratio of net income to average
daily net assets 5.23% 3.12% 2.67% 3.93% 6.55% 7.85% 8.68% 6.77% 5.87% 7.00%
_________________________________________________________________________________________________________________________
Total Return** 5.27% 3.15% 2.73% 3.98% 6.77% 8.18% 8.99% 7.01% 6.01% 7.20%
_________________________________________________________________________________________________________________________
*For a share outstanding throughout the year. Rounded to the nearest cent.
**Total return does not reflect payment of the expenses that apply to the variable accounts or any annuity charges.
</TABLE>
<PAGE>
PAGE 12
<TABLE>
<CAPTION>
International Equity Fund
Financial highlights

Fiscal period ended August 31,
Per share income and capital changes*

1995 1994 1993 1992**
<S> <C> <C> <C> <C>
Net asset value, beginning of period $12.91 $11.60 $10.01 $10.00
_____________________________________________________________________________________________
Income from investment operations:
Net investment income .17 .14 .15 .05
Net gains (losses) on securities (both
realized and unrealized) (.37) 1.61 1.81 .01
_____________________________________________________________________________________________
Total from investment operations (.20) 1.75 1.96 .06
_____________________________________________________________________________________________
Less distributions:
Dividends from net investment income (.16) (.08) (.15) (.05)
Distributions from realized gains - (.29) (.22) -
Excess distributions from realized gains - (.07) - -
_____________________________________________________________________________________________
Total distributions (.16) (.44) (.37) (.05)
_____________________________________________________________________________________________
Net asset value, end of period $12.55 $12.91 $11.60 $10.01
_____________________________________________________________________________________________

Ratios/supplemental data
1995 1994 1993 1992**
Net assets, end of period (in millions) $1,442 $1,111 $ 291 $ 39
_____________________________________________________________________________________________
Ratio of expenses to average
daily net assets 1.03% .98% 1.10% 1.57%***
Ratio of net income to average
daily net assets 1.56% 1.09% 1.37% 0.93%***
Portfolio turnover rate (excluding
short-term securities) 38% 51% 62% 22%
_____________________________________________________________________________________________
Total Return# (1.77%) 15.11% 19.76% 0.55%#
_____________________________________________________________________________________________
*For a share outstanding throughout the period. Rounded to the nearest cent.
**Commencement of operations. Period from Jan. 13, 1992 to Aug. 31, 1992.
***Adjusted to an annual basis.
#Total return does not reflect payment of the expenses that apply to the variable accounts
or any annuity charges.
</TABLE>
<PAGE>
PAGE 13
<TABLE>
<CAPTION>
Aggressive Growth Fund
Financial highlights

Fiscal period ended August 31,
Per share income and capital changes*

1995 1994 1993 1992**
<S> <C> <C> <C> <C>
Net asset value, beginning of period $11.46 $11.68 $9.00 $10.00
_____________________________________________________________________________________________
Income (loss) from investment operations:
Net investment income .08 .01 .02 .02
Net gains (losses) on securities (both
realized and unrealized) 2.98 (.22) 2.68 (1.00)
_____________________________________________________________________________________________
Total from investment operations 3.06 (.21) 2.70 (0.98)
_____________________________________________________________________________________________
Less distributions:
Dividends from net investment income (.08) (.01) (.02) (.02)
_____________________________________________________________________________________________
Net asset value, end of period $14.44 $11.46 $11.68 $ 9.00
_____________________________________________________________________________________________

Ratios/supplemental data
1995 1994 1993 1992**

Net assets, end of period (in millions) $1,412 $ 763 $ 299 $ 57
_____________________________________________________________________________________________
Ratio of expenses to average
daily net assets .70% .69% .75% .98%***
Ratio of net income to average
daily net assets 0.72% 0.14% 0.28% 0.21%***
Portfolio turnover rate (excluding
short-term securities) 116% 59% 55% 28%
_____________________________________________________________________________________________
Total Return# 26.80% (1.77)% 29.98% (9.76)%
_____________________________________________________________________________________________
*For a share outstanding throughout the period. Rounded to the nearest cent.
**Commencement of operations. Period from Jan. 13, 1992 to Aug. 31, 1992.
***Adjusted to an annual basis.
#Total return does not reflect payment of the expenses that apply to the variable accounts or
any annuity charges.
</TABLE>

The information in these tables has been audited by KPMG Peat
Marwick LLP, independent auditors. The independent auditors'
report and additional information about the performance of the
Funds is contained in the Fund's annual report which, if not
included with this prospectus, may be obtained without charge.

Total returns

Average annual total returns as of Aug. 31, 1995

Purchase 1 year 5 years 10 years
made ago ago ago

Capital Resource
Fund +17.2% +16.0% +14.2%

S&P 500 +21.3 +15.1 +15.2

Cumulative total returns as of Aug. 31, 1995

Purchase 1 year 5 years 10 years
made ago ago ago
<PAGE>
PAGE 14
Capital Resource
Fund +17.2% +109.6% +278.5%

S&P 500 +21.3 +102.2 +310.8

Average annual total returns as of Aug. 31, 1995

Purchase 1 year 5 years 10 years
made ago ago ago

Special Income Fund +13.8% +11.5% +10.3%

Lehman Aggregate
Bond Index +11.0 + 9.6 + 9.9

Cumulative total returns as of Aug. 31, 1995

Purchase 1 year 5 years 10 years
made ago ago ago

Special Income Fund +13.8% +72.2% +167.5%

Lehman Aggregate
Bond Index +11.0 +57.8 +157.6

Average annual total returns as of Aug. 31, 1995

Since
Purchase 1 year 5 Years inception
made ago ago April 30, 1986

Managed Fund +11.9% +13.2% +11.0%

S&P 500 +21.3 +15.1 +13.3

Cumulative total returns as of Aug. 31, 1995

Since
Purchase 1 year 5 Years inception
made ago ago April 30, 1986

Managed Fund +11.9% + 85.6% +164.4%

S&P 500 +21.3 +102.2 +220.7

Average annual total returns as of Aug. 31, 1995

Since
Purchase 1 year inception
made ago Jan. 13, 1992

International
Equity Fund -1.8% + 8.9%

Morgan Stanley
Capital International
World Index +8.8 +10.2<PAGE>
PAGE 15
Cumulative total returns as of Aug. 31, 1995

Since
Purchase 1 year inception
made ago Jan. 13, 1992

International
Equity Fund -1.8% +36.2%

Morgan Stanley
Capital International
World Index +8.8 +42.3

Average annual total returns as of Aug. 31, 1995

Since
Purchase 1 year inception
made ago Jan. 13, 1992

Aggressive Growth
Fund +26.8% +11.0%

S&P 500 +21.3 +11.7

Cumulative total returns as of Aug. 31, 1995

Since
Purchase 1 year inception
made ago Jan. 13, 1992

Aggressive Growth
Fund +26.8% +46.1%

S&P 500 +21.3 +49.2

Average annual total returns as of Aug. 31, 1995*

Purchase 1 year 5 years 10 years
made ago ago ago

Growth Dimensions

S&P 500

Lipper Growth
Fund Index

<PAGE>
PAGE 16
Cumulative total returns as of Aug. 31, 1995*

Purchase 1 year 5 years 10 years
made ago ago ago

Growth Dimensions

S&P 500

Lipper Growth
Fund Index

Average annual total returns as of Aug. 31, 1995*

Purchase 1 year 5 years Since
made ago ago inception**

Global Yield

Salomon Brothers
Global Gov't. Bond
Composite Index

Lipper General World
Income Fund Index

**March 20, 1989

Cumulative total returns as of Aug. 31, 1995*

Purchase 1 year 5 years Since
made ago ago inception**

Global Yield

Salomon Brothers
Global Gov't. Bond
Composite Index

Lipper General World
Income Fund Index

**March 20, 1989

Average annual total returns as of Aug. 31, 1995*

Purchase 1 year 5 years 10 years
made ago ago ago

Income Advantage

Lehman Aggregate
Bond Index
<PAGE>
PAGE 17
Cumulative total returns as of Aug. 31, 1995*

Purchase 1 year 5 years 10 years
made ago ago ago

Income Advantage

Lehman Aggregate
Bond Index

*This total return information is calculated on the basis of total
returns for IDS New Dimensions, Global Bond and Extra Income funds.
However, this information assumes the deduction of the Fund
expenses that apply to IDS Life Growth Dimensions, Global Yield and
Income Advantage funds.

These examples show total returns from hypothetical investments in
each Fund. These returns are compared to those of popular indexes
for the same periods. The results do not reflect the expenses that
apply to the variable accounts or the annuity contract. Inclusion
of these charges would reduce total return for all periods shown.

For purposes of calculation, information about each Fund assumes
the deduction of applicable fund expenses, makes no adjustments for
taxes that may have been paid on the reinvested income and capital
gains and covers a period of widely fluctuating securities prices.
Returns shown should not be considered a representation of the
Fund's future performance.

Each Fund's investments may be different from those in the indexes.
The indexes reflect reinvestment of all distributions and changes
in market prices, but exclude brokerage commissions or other fees.

Standard & Poor's 500 Stock Index (S&P 500), an unmanaged list of
common stocks, is frequently used as a general measure of market
performance.

The Morgan Stanley Capital International World Index, compiled from
a composite of securities listed on the markets of North America,
Europe, Australasia and the Far East is widely recognized by
investors as the measurement index for portfolios that invest in
the major markets of the world.

Lehman Aggregate Bond Index is made up of a representative list of
government and corporate bonds as well as asset-backed securities
and mortgage-backed securities. The index is frequently used as a
general measure of bond market performance. However, the
securities used to create the index may not be representative of
the bonds held in Special Income or Income Advantage Funds.

Lipper Growth Fund Index, published by Lipper Analytical Services,
Inc., includes 30 funds that are generally similar to Growth
Dimensions Fund, although some funds in the index may have somewhat
different investment policies or objectives.

Salomon Brothers Global Government Bond Composite Index is a
representative list of government bonds of 17 countries throughout
the world. The index is a general measure of government bond<PAGE>
PAGE 18
performance. Performance is expressed in the U.S. dollar as well
as the currencies of governments making up the index. The bonds
included in the index may not be the same as those in Global Yield
Fund.

Lipper General World Income Fund Index, published by Lipper
Analytical Services, Inc., includes 30 funds that are generally
similar to Global Yield Fund, although some funds in the index may
have somewhat different investment policies or objectives.

Yield calculation

Special Income, Global Yield and Income Advantage Funds may
calculate a 30-day annualized yield by dividing:

o net investment income per share deemed earned during a 30-day
period by

o the net asset value per share on the last day of the period,
and

o converting the result to a yearly equivalent figure.

This yield calculation does not include any annuity charges or
contingent deferred sales charges, which would reduce the yield
quoted.

A fund's yield varies from day to day, mainly because share values
and net asset values (which are calculated daily) vary in response
to changes in interest rates. Net investment income normally
changes much less in the short run. Thus, when interest rates rise
and share values fall, yield tends to rise. When interest rates
fall, yield tends to follow.

Moneyshare Fund calculates annualized simple and compound yields
based on a seven-day period.

Past yields should not be considered an indicator of future yields.

Key terms

Average annual total return - The annually compounded rate of
return over a given time period (usually two or more years) --
total return for the period converted to an equivalent annual
figure.

Capital gains or losses - Increase or decrease in value of the
securities the funds hold. Gains are realized when securities that
have increased in value are sold. A fund also may have unrealized
gains or losses when securities increase or decrease in value but
are not sold.

Close of business - Normally 3 p.m. Central time each business day
(any day the New York Stock Exchange is open).<PAGE>
PAGE 19
Distributions - Payments to the variable accounts of two types:
investment income (dividends) and realized net long-term capital
gains (capital gains distributions).

Investment income - Dividends and interest earned on securities
held by the funds.

Net asset value (NAV) - Value of a single fund share. It is the
total market value of all of a fund's investments and other assets,
less any liabilities, divided by the number of shares outstanding.

The NAV is the price the variable account receives when it sells
shares. It usually changes from day to day, and is calculated at
the close of business. For Special Income, Global Yield and Income
Advantage funds, NAV generally declines as interest rates increase
and rises as interest rates decline.

Total return - Sum of all returns for a given period, assuming
reinvestment of all distributions. Calculated by taking the total
value of shares at the end of the period (including shares acquired
by reinvestment), less the price of shares purchased at the
beginning of the period.

Variable accounts - The separate accounts or subaccounts, each of
which invests in shares of one of the funds.

Yield - Net investment income earned per share for a specified time
period, divided by the net asset value at the end of the period.

Investment policies and risk

Capital Resource Fund - Under normal market conditions, Capital
Resource Fund invests primarily in U.S. common stocks and other
securities convertible into common stock. The portfolio manager
selects investments believed to have potential for capital growth.

The Fund also may invest in preferred stocks, bonds, debt
securities, foreign securities, money market instruments and
derivative instruments.

Special Income Fund - Under normal market conditions, Special
Income Fund invests primarily in debt securities. At least 50% of
its net assets are invested in corporate bonds of the four highest
ratings, in other corporate bonds the investment manager believes
have the same investment qualities and in government bonds.

The Fund also may invest in corporate bonds with lower ratings,
convertible securities, preferred stocks, derivative instruments,
money market instruments and foreign bonds.

Managed Fund - Under normal market conditions, Managed Fund invests
at least 50% of its total assets in common stocks. The Fund also
invests in preferred stocks, convertible securities, warrants,
bonds and money market instruments. Ordinarily, investments other
than common stock would constitute 50% or less of the Fund's
portfolio. However, under unusual market conditions, the Fund may
<PAGE>
PAGE 20
invest any portion of its assets in securities other than common
stocks. This allows the investment manager flexibility to best
achieve the Fund's goal. This might occur, for example, when
interest rates are high but are expected to decline significantly.

The Fund also may invest in derivative instruments and foreign
securities.

Moneyshare Fund - Under normal market conditions, Moneyshare Fund
invests primarily in high-quality, short-term, debt securities and
other money market instruments denominated in U.S. dollars. The
Fund intends to maintain a constant net asset value of $1 per
share, although there is no assurance it will be able to do so.
The Fund will not purchase any security with a remaining maturity
of more than 13 months and will maintain a dollar-weighted average
portfolio maturity of 90 days or less. The Fund also may invest in
foreign securities. For a description of money market securities,
see Appendix C in the SAI.

International Equity Fund - Under normal market conditions,
International Equity Fund invests at least 65% of its total assets
in foreign equity securities having a potential for superior
growth. Superior means fund performance better than the Morgan
Stanley Capital International World Index.

The Fund's investments will be primarily in common stocks and
securities convertible into common stocks of foreign issuers.
However, if the investment manager believes they have more
potential for capital growth, the Fund may invest in bonds issued
or guaranteed either by countries that are members of the
Organization for Economic Cooperation and Development (OECD) or by
international agencies such as the World Bank or the European
Investment Bank. These bonds will not be purchased unless, in the
judgment of the investment manager, they are comparable in quality
to bonds rated AA by Standard & Poor's Corporation (S&P).

The percentage of fund assets invested in particular countries or
regions of the world will change according to their political
stability and economic condition. Ordinarily, the Fund will invest
in companies domiciled in at least three foreign countries.

Normally, investments in U.S. issuers will constitute less than 20%
of the Fund's portfolio. However, as a temporary measure, the Fund
may invest any portion of its assets in securities of U.S. issuers
that appear to have greater potential for superior growth than
foreign securities. U.S. investments would include common stocks,
convertible securities and corporate and government bonds.

The bonds must bear one of the four highest ratings given by
Moody's or S&P or must be of comparable quality. The Fund also may
invest in money market instruments and derivative instruments. No
more than 5% of the Fund's total assets may be invested in options
on individual securities.

<PAGE>
PAGE 21
Aggressive Growth Fund - Under normal market conditions, Aggressive
Growth Fund invests primarily in common stocks of U.S. and foreign
companies that are small and medium size growth companies. Many of
these companies emphasize technological innovation or productivity
improvements.

The Fund invests in warrants to purchase common stock, debt
securities or in securities of large, well-established companies
when the portfolio manager believes those investments offer the
best opportunity for capital growth. The Fund also may invest in
foreign securities, derivative instruments and money market
instruments.

Growth Dimensions - Under normal market conditions, Growth
Dimensions invests primarily in common stocks of U.S. and foreign
corporations showing potential for significant growth. These
companies usually operate in areas where dynamic economic and
technological changes are occurring. They also may exhibit
excellence in technology, marketing or management. Other
investments include debt securities, preferred stocks, derivative
instruments and money market instruments.

Global Yield - Under normal market conditions, Global Yield invests
primarily in debt securities of U.S. and foreign issuers so under
normal market conditions at least 80% of the fund's net assets will
be investment-grade corporate bonds or government bonds.

The fund will invest the other 20% of its net assets in debt
securities below investment grade, convertible securities, common
stocks, derivative instruments and money market instruments.

Under normal market conditions, the Fund will invest at least 65%
of its total assets in bonds issued by foreign corporations and
governments located in at least 3 different countries.

Since the Fund is a non-diversified mutual fund, it may concentrate
its investments in securities of only a few companies or
governments or may invest more than 25% of its assets in government
securities of a single country. Accordingly, the Fund may have
more risk than mutual funds that have broader diversification.

Income advantage - Under normal market conditions, Income Advantage
invests primarily in debt securities below investment grade issued
by U.S. and foreign corporations. Most of these will be rated BBB,
BB or B by Standard & Poor's Corporation (S&P) or the Moody's
Investors Service, Inc. (Moody's) equivalent. However, the Fund
may invest in debt securities with lower ratings, including those
in default. Other investments include investment-grade bonds,
convertible securities, stocks, derivative instruments and money
market instruments.

The various types of investments the portfolio managers use to
achieve investment performance are described in more detail in the
next section and in the SAI.

<PAGE>
PAGE 22
Facts about investments and their risks

Common stocks: Stock prices are subject to market fluctuations.
Stocks of smaller or foreign companies may be subject to abrupt or
erratic price movements. Also, small companies often have limited
product lines, smaller markets or fewer financial resources.
Therefore, some of the securities in which a fund invests involve
substantial risk and may be considered speculative.

Preferred stocks: If a company earns a profit, it generally must
pay its preferred stockholders a dividend at a pre-established
rate.

Convertible securities: These securities generally are preferred
stocks or bonds that can be exchanged for other securities, usually
common stock, at prestated prices. When the trading price of the
common stock makes the exchange likely, the convertible securities
trade more like common stock.

Debt securities: The price of an investment grade bond fluctuates
as interest rates change or if its credit rating is upgraded or
downgraded.

Securities that are subsequently downgraded in quality may continue
to be held and will be sold only when the fund's investment manager
believes it is advantageous to do so.
<TABLE><CAPTION>
Bond ratings and holdings for fiscal year ended Aug. 31, 1995
For Special Income Fund

Percent of
net assets
in unrated
S&P Rating Protection of securities
Percent of (or Moody's principal and assessed by
net assets equivalent) interest AEFC
<S> <C> <C> <C>
23.11% AAA Highest quality 1.29%
2.58 AA High quality .08
9.68 A Upper medium grade .21
19.91 BBB Medium grade .45
14.29 BB Moderately speculative .09
10.04 B Speculative 1.51
.65 CCC Highly speculative .13
CC Poor quality
C Lowest quality
D In default
3.89 Unrated Unrated securities .13
</TABLE>
<PAGE>
PAGE 23
<TABLE><CAPTION>
Bond ratings and holdings for fiscal year ended Aug. 31, 1995
For Managed Fund

Percent of
net assets
in unrated
S&P Rating Protection of securities
Percent of (or Moody's principal and assessed by
net assets equivalent) interest AEFC
<S> <C> <C> <C>
5.47% AAA Highest quality .06%
1.52 AA High quality
2.05 A Upper medium grade .04
3.56 BBB Medium grade .06
2.68 BB Moderately speculative .01
1.79 B Speculative .24
.17 CCC Highly speculative .05
CC Poor quality
C Lowest quality
1.10 D In default .64
Unrated Unrated securities
Bond ratings and holdings
</TABLE>
(See Appendix to the SAI for further information regarding
ratings.)

Debt securities sold at a deep discount: Some bonds are sold at
deep discounts because they do not pay interest until maturity.
They include zero coupon bonds and PIK (pay-in-kind) bonds. To
comply with tax laws, a fund has to recognize a computed amount of
interest income and pay dividends to shareholders even though no
cash has been received. In some instances, a fund may have to sell
securities to have sufficient cash to pay the dividends.

Mortgage-backed securities: All Funds except Moneyshare may invest
in U.S. government securities representing part ownership of pools
of mortgage loans. A pool, or group, of mortgage loans issued by
such lenders as mortgage bankers, commercial banks and savings and
loan associations, is assembled and mortgage pass-through
certificates are offered to investors through securities dealers.

In pass-through certificates, both principal and interest payments,
including prepayments, are passed through to the holder of the
certificate. Prepayments on underlying mortgages result in a loss
of anticipated interest, and the actual yield (or total return) to
the Fund, which is influenced by both stated interest rates and
market conditions, may be different than the quoted yield on the
certificates.

Foreign investments: Securities of foreign companies and
governments may be traded in the United States, but often they are
traded only on foreign markets. Frequently, there is less
information about foreign companies and less government supervision
of foreign markets. Foreign investments are subject to political
and economic risks of the countries in which the investments are
made including the possibility of seizure or nationalization of
companies, imposition of withholding taxes on income, establishment
of exchange controls or adoption of other restrictions that might
affect an investment adversely. If an investment is made in a
foreign market, the local currency must be purchased. This is done
by using a forward contract in which the price of the foreign
<PAGE>
PAGE 24
currency in U.S. dollars is established on the date the trade is
made, but delivery of the currency is not made until the securities
are received. As long as the fund holds foreign currencies or
securities valued in foreign currencies, the price of a fund share
will be affected by changes in the value of the currencies relative
to the U.S. dollar. Because of the limited trading volume in some
foreign markets, efforts to buy or sell a security may change the
price of the security and it may be difficult to complete the
transaction. Each Fund, except International Equity and Global
Yield Funds may invest up to 25% (Growth Dimensions may invest up
to 30%) of its total assets at the time of purchase in securities
of foreign issuers.

Derivative instruments: For all Funds except Moneyshare, the
portfolio managers may use derivative instruments in addition to
securities to achieve investment performance. Derivative
instruments include futures, options and forward contracts. Such
instruments may be used to maintain cash reserves while remaining
fully invested, to offset anticipated declines in values of
investments, to facilitate trading, to reduce transaction costs or
to pursue higher investment returns. Derivative instruments are
characterized by requiring little or no initial payment and a daily
change in price based on or derived from a security, a currency, a
group of securities or currencies or an index. A number of
strategies or combination of instruments can be used to achieve the
desired investment performance characteristics. A small change in
the value of the underlying security, currency or index will cause
a sizable gain or loss in the price of the derivative instrument.
Derivative instruments allow a portfolio manager to change the
investment performance characteristics very quickly and at lower
costs. Risks include losses of premiums, rapid changes in prices,
defaults by other parties and inability to close such instruments.
A fund will use derivative instruments only to achieve the same
investment performance characteristics it could achieve by directly
holding those securities and currencies permitted under the
investment policies. The Fund's custodian will maintain, in a
segregated account, cash or liquid high-grade debt securities that
are marked to market daily and are at least equal in value to the
Fund's obligations to the extent such obligations are not covered.
No more than 5% of each Fund's net assets can be used at any one
time for good faith deposits on futures and premiums for options on
futures that do not offset existing investment positions. For
further information, see the options and futures appendixes in the
SAI.

Securities and derivative instruments that are illiquid: Illiquid
means the security or derivative instrument cannot be sold quickly
in the normal course of business. Some investments cannot be
resold to the U.S. public because of their terms or government
regulations. All securities and derivative instruments, however,
can be sold in private sales, and many may be sold to other
institutions and qualified buyers or on foreign markets. Each
portfolio manager will follow guidelines established by the board
of directors and consider relevant factors such as the nature of
the security and the number of likely buyers when determining
<PAGE>
PAGE 25
whether a security is illiquid. No more than 10% of each Fund's
net assets (zero for Moneyshare) will be held in securities and
derivative instruments that are illiquid.

Money market instruments: For all Funds except Moneyshare, short-
term debt securities rated in the top two grades are used to meet
daily cash needs and at various times to hold assets until better
investment opportunities arise. Generally, less than 25% of each
of Capital Resource, International Equity, Aggressive Growth,
Special Income, Managed, Growth Dimensions, Global Yield and Income
Advantage Fund's total assets are in these money market
instruments. However, for temporary defensive purposes these
investments could exceed that amount for a limited period of time.

The investment policies described above may be changed by the board
of directors.

Lending portfolio securities: Each Fund may lend its securities to
earn income so long as borrowers provide collateral equal to the
market value of the loans. The risks are that borrowers will not
provide collateral when required or return securities when due.
Unless shareholders approve otherwise, loans may not exceed 30% of
a Fund's net assets.

Alternative investment options

In the future, the board of the Funds may determine for operating
efficiencies to use a master/feeder structure. Under that
structure, the Fund's investment portfolio would be managed by
another investment company with the same goal as the Fund, rather
than investing directly in a portfolio of securities.

Valuing assets

Moneyshare Fund's securities are valued at amortized cost. In
valuing assets of Capital Resource, International Equity,
Aggressive Growth, Special Income, Managed, Growth Dimensions,
Global Yield and Income Advantage funds:

o Securities and assets with available market values are valued
on that basis.

o Securities maturing in 60 days or less are valued at amortized
cost.

o Securities and assets without readily available market values
are valued according to methods selected in good faith by the
board of directors.

o Assets and liabilities denominated in foreign currencies are
translated daily into U.S. dollars at a rate of exchange set
as near to the close of the day as practicable.

<PAGE>
PAGE 26
How to invest, transfer or redeem shares

How to invest

You may invest in the Funds only by buying a variable annuity
contract. For further information concerning maximum and minimum
payments and submitting and acceptance of your application, see
your annuity prospectus.

How to transfer among variable accounts

You can transfer all or part of your value in a variable account to
one or more of the other variable accounts with different
investment objectives. Please refer to your variable annuity
prospectus for more information about transfers.

Redeeming shares

The Funds will buy (redeem) any shares presented by the variable
accounts. Surrender or withdrawal details are described in your
variable annuity prospectus.

Payment generally will be mailed within seven days of the
redemption request. The amount may be more or less than the amount
invested. Shares will be redeemed at net asset value at the close
of business on the day the request is accepted at the Minneapolis
office. If the request arrives after the close of business, the
price per share will be the net asset value at the close of
business on the next business day.

Distributions and taxes

The Funds distribute to shareholders (the variable accounts) net
investment income and net capital gains. They do so to qualify as
regulated investment companies and to avoid paying corporate income
and excise taxes.

Dividend and capital gain distributions

Capital Resource, International Equity, Aggressive Growth, Managed
and Growth Dimensions funds distribute their net investment income
(dividends and interest earned on securities held by the Fund, less
operating expenses) to shareholders (the variable accounts) at the
end of each calendar quarter. For Special Income, Moneyshare,
Global Yield and Income Advantage funds, net investment income is
distributed monthly. Net realized capital gains, if any, from
selling securities are distributed at the end of the calendar year.
Before they are distributed, both net investment income and net
capital gains are included in the value of each share. After they
are distributed, the value of each share drops by the per-share
amount of the distribution. (Since the distributions are
reinvested, the total value of the holdings will not change.) The
reinvestment price is the net asset value at close of business on
the day the distribution is paid.

<PAGE>
PAGE 27
Taxes

The Internal Revenue Service has issued final regulations relating
to the diversification requirements under section 817(h) of the
Internal Revenue Code. Each Fund intends to comply with these
requirements.

Federal income taxation of variable accounts, life insurance
companies and annuities is discussed in your annuity prospectus.

Income received by International Equity and Global Yield funds may
be subject to foreign tax and withholding. Tax conventions between
certain countries and the United States may reduce or eliminate
those taxes.

How the Funds are organized

IDS Life Investment Series, Inc. formerly known as IDS Life Capital
Resource Fund, Inc., is a series mutual fund. It has four series
of stock representing four separate, diversified funds - Capital
Resource, International Equity, Aggressive Growth and Growth
Dimensions. Capital Resource was incorporated in Nevada on April
27, 1981, but changed its state of incorporation to Minnesota on
June 13, 1986. International Equity and Aggressive Growth funds
began operations on Jan. 13, 1992. Growth Dimensions began
operations on April 30, 1996. IDS Life Special Income Fund, Inc.
is a series mutual fund. It has three series of stock representing
two separate, diversified funds - Special Income and Income
Advantage and one separate non-diversified fund - Global Yield.
IDS Life Special Income Fund, and IDS Life Moneyshare Fund were
originally incorporated in Nevada on April 27, 1981, but changed
their state of incorporation to Minnesota on June 13, 1986. Global
Yield and Income Advantage began operation on April 30, 1996. IDS
Life Managed Fund, Inc. was incorporated in Minnesota on March 5,
1985.

All Funds are open-end management investment companies as defined
in the Investment Company Act of 1940. The headquarters of the
Funds is IDS Tower 10, Minneapolis, MN 55440-0010. The Funds are
part of the IDS MUTUAL FUND GROUP, a family of funds that began in
1940.

A fund is owned by the variable accounts, its shareholders. All
shares issued by each Fund are of the same class -- capital stock.
Par value is 1 cent per share ($.001 for Managed Fund). Both full
and fractional shares can be issued.

Voting rights

For a discussion of the rights of annuity contract owners
concerning the voting of shares held by the variable accounts,
please see your annuity prospectus. All shares have equal voting
rights. In any matter requiring the vote of shareholders (the
fund's management and fundamental policies), IDS Life and its
affiliates will ask for instructions from the person with voting
<PAGE>
PAGE 28
rights. The number of votes you have is in proportion to the
amount you have allocated to each variable account. Your
instructions will be weighted in the same proportion and IDS Life
and its affiliates will vote them that way. We will vote those
shares for which we do not receive instructions, and those shares
for which we have voting rights, those in the same proportion as
the shares for which we have received instructions.

Shareholder meetings

The Funds do not hold annual shareholder meetings. However, the
directors may call meetings at their discretion, or on demand by
holders of 10% or more of the outstanding shares, to elect or
remove directors. Meetings of the shareholders also may be called
on demand by the holders of 3% or more of the outstanding shares of
each Fund if no meeting has been held during the preceding 15
months.

Portfolio managers

Capital Resource

Curt Weaver joined AEFC in 1979 and serves as senior portfolio
manager. He has managed this Fund since 1987. He also serves as a
member of the Growth Income team.

Special Income

Steve Merrell joined AEFC in 1988 as a quantitative investment
analyst. He became portfolio manager of this Fund in January 1995.
From 1990 to 1991, Steve worked for JP Morgan Futures, Inc.
marketing futures-based investment strategies. Rejoining AEFC in
1991 as an associate portfolio manager, Steve was promoted to
portfolio manager in 1993. He manages a number of fixed-income
portfolios and also works as part of a team with IDS Global Bond
Fund.

Managed

Mike Ducar joined AEFC in 1974 and serves as senior portfolio
manager. He has managed the equity portfolio of this Fund since
1991. He had served as director-investment research and vice
president of investment services. He also is a member of IDS
Growth Income team.

Deb Pederson joined AEFC in 1986 and serves as portfolio manager.
She has managed the fixed income portfolio of this Fund since
January 1994. She also manages the fixed income portfolio of IDS
Life Series Fund, Inc. - Managed Portfolio and the low grade
invested assets of IDS Life, IDS Life Insurance Company of New York
and American Enterprise Life Insurance Company.

Moneyshare

Terry Fettig joined AEFC in 1986. He serves as portfolio manager
for this Fund, IDS Cash Management Fund and IDS Tax-Free Money
Fund. From 1986 to 1992 he was a fixed income securities analyst.
From 1992 to 1993 he was an associate portfolio manager.<PAGE>
PAGE 29
International Equity

Peter Lamaison joined AEFC in 1981 and serves as president and
chief executive officer of IDS International, Inc. and senior
portfolio manager. He has managed this Fund since 1992. He also
serves as portfolio manager of IDS International Fund.

Wes Wadman joined AEFC in 1964 and serves as executive vice
president of IDS International, Inc. and as executive vice
president of IDS Advisory Group Inc. He has served as portfolio
manager of this Fund since its inception.

Paul Hopkins joined AEFC in 1992 and serves as chief investment
officer and executive vice president of IDS International, Inc. He
was appointed to the portfolio management team of this Fund in
January 1994. He also serves as portfolio manager of IDS
International Fund. Prior to joining AEFC, he was director of
international equities for Bankers Trust.

Aggressive Growth

Marty Hurwitz joined AEFC in 1987 and serves as portfolio manager.
He was appointed to manage this Fund in January 1995. He has
managed IDS Life Series Equity Portfolio since July 1993 and also
manages accounts for IDS Advisory Portfolio Management Group.

Growth Dimensions

Gordon Fines joined AEFC in 1981 and serves as porfolio manager of
this Fund and has served as vice president and senior portfolio
manager of IDS New Dimensions Fund since 1991. Mr. Fines also
leads the growth team for AEFC. From 1985 to 1991, he was
portfolio manager of IDS Managed Retirement Fund.

Global Yield

Ray Goodner joined AEFC in 1977 and serves as portfolio manager of
this Fund and as vice president and senior portfolio manager of IDS
Global Bond Fund. He began his career in portfolio management in
1980. He has managed IDS Global Bond Fund since 1989. Since 1985
he also has served as portfolio manager of IDS Selective Fund.

Income Advantage

Jack Utter joined AEFC in 1962 and serves as senior portfolio
manager. Since 1985 he also has served as portfolio manager of IDS
Extra Income Fund.

Dave Gilson joined AEFC in 1989 and serves as associate manager of
this Fund. He served as an analyst for all equity mutual funds
from 1989 to 1993 and all high yield funds from Aug. 1993 to April
1996.

Directors and officers

Shareholders elect a board of directors who oversee the operations
of the Funds and choose its officers. Its officers are responsible
for day-to-day business decisions based on policies set by the <PAGE>
PAGE 30
board. The board has named an executive committee that has
authority to act on its behalf between meetings. The directors
also serve on the boards of all of the other funds in the IDS
MUTUAL FUND GROUP. On Aug. 31, 1995, the Fund's directors and
officers did not own any shares of the Funds.

Directors and officers of the Funds

President and interested director

William R. Pearce
President of all funds in the IDS MUTUAL FUND GROUP.

Independent directors

Lynne V. Cheney
Distinguished fellow, American Enterprise Institute for Public
Policy Research.

Robert F. Froehlke
Former president of all funds in the IDS MUTUAL FUND GROUP.

Heinz F. Hutter
Former president and chief operating officer, Cargill,
Incorporated.

Anne P. Jones
Attorney and telecommunications consultant.

Donald M. Kendall
Former chairman and chief executive officer, PepsiCo, Inc.

Melvin R. Laird
Senior counsellor for national and international affairs, The
Reader's Digest Association, Inc.

Lewis W. Lehr
Former chairman and chief executive officer, Minnesota Mining and
Manufacturing Company (3M).

Edson W. Spencer
Former chairman and chief executive officer, Honeywell, Inc.

Wheelock Whitney
Chairman, Whitney Management Company.

C. Angus Wurtele
Chairman of the board and chief executive officer, The Valspar
Corporation.

Interested directors who are officers and/or employees of AEFC

David R. Hubers
President and chief executive officer, AEFC.

James A. Mitchell
Executive vice president, AEFC.
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John R. Thomas
Senior vice president, AEFC.

Officers who also are officers and/or employees of AEFC

Peter J. Anderson
Vice president of all funds in the IDS MUTUAL FUND GROUP.

Melinda S. Urion
Treasurer of all funds in the IDS MUTUAL FUND GROUP.

Other officer

Leslie L. Ogg
Vice president, general counsel and secretary of all funds in the
IDS MUTUAL FUND GROUP.

Refer to the SAI for the directors' and officers' biographies.

Investment manager

Each Fund pays IDS Life for managing its portfolio and serving as
transfer agent.

Under its Investment Management Services Agreement, IDS Life
determines which securities will be purchased, held or sold
(subject to the direction and control of the Fund's board of
directors). Under the current agreement, the Funds pay IDS Life a
fee for these services based on the average daily net assets of
each Fund, as follows:

Capital Resource Fund

Assets Annual rate at
(billions) each asset level
First $1 0.630%
Next $1 0.615
Next $1 0.600
Next $3 0.585
Over $6 0.570

Special Income Fund

Assets Annual rate at
(billions) each asset level
First $1 0.610%
Next $1 0.595
Next $1 0.580
Next $3 0.565
Next $3 0.550
Over $9 0.535

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Managed Fund

Assets Annual rate at
(billions) each asset level
First $0.5 0.630%
Next $0.5 0.615
Next $1 0.600
Next $1 0.585
Next $3 0.570
Over $6 0.550

Moneyshare Fund

Assets Annual rate at
(billions) each asset level
First $1 0.510%
Next $0.5 0.493
Next $0.5 0.475
Next $0.5 0.458
Over $2.5 0.440

International Equity Fund

Assets Annual rate at
(billions) each asset level
First $0.25 0.870%
Next $0.25 0.855
Next $0.25 0.840
Next $0.25 0.825
Next $1 0.810
Over $2 0.795

Aggressive Growth Fund

Assets Annual rate at
(billions) each asset level
First $0.25 0.650%
Next $0.25 0.635
Next $0.25 0.620
Next $0.25 0.605
Next $1 0.590
Over $2 0.575

Growth Dimensions Fund

Assets Annual rate at
(billions) each asset level
First $1 0.630%
Next $1 0.615
Next $1 0.600
Next $3 0.585
Over $6 0.570

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PAGE 33
Global Yield Fund

Assets Annual rate at
(billions) each asset level
First $0.25 0.840%
Next $0.25 0.825
Next $0.25 0.810
Next $0.25 0.795
Over $1 0.780

Income Advantage Fund

Assets Annual rate at
(billions) each asset level
First $1 0.620%
Next $1 0.605%
Next $1 0.590%
Next $3 0.575%
Next $3 0.560%
Over $9 0.545%

For the fiscal year ended Aug. 31, 1995, under the prior and
current agreements Capital Resource Fund paid IDS Life a total
investment management fee of .63% of its average daily net assets.
Special Income Fund paid .63%, Managed Fund paid .63%, Moneyshare
Fund paid .54%, International Equity Fund paid .87%, and Aggressive
Growth Fund paid .63%. Under this Agreement, each Fund also pays
taxes, brokerage commissions and nonadvisory expenses. Total fees
and expenses for fiscal year 1995 were .69% for Capital Resource
Fund, .68% for Special Income Fund, .68% for Managed Fund, .59% for
Moneyshare Fund, 1.03% for International Equity Fund, .70% for
Aggressive Growth Fund.

Administrative Services Agreement

Under an Administrative Services Agreement, each Fund pays AEFC for
administration and accounting services as follows:
Capital Resource Fund

Assets Annual rate at
(billions) each asset level
First $1 0.050%
Next $1 0.045
Next $1 0.040
Next $3 0.035
Over $6 0.030

Special Income Fund

Assets Annual rate at
(billions) each asset level
First $1 0.050%
Next $1 0.045
Next $1 0.040
Next $3 0.035
Next $3 0.030
Over $9 0.025
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PAGE 34
Managed Fund

Assets Annual rate at
(billions) each asset level
First $0.5 0.040%
Next $0.5 0.035
Next $1 0.030
Next $1 0.025
Next $3 0.020
Over $6 0.020

Moneyshare Fund

Assets Annual rate at
(billions) each asset level
First $1 0.030%
Next $0.5 0.027
Next $0.5 0.025
Next $0.5 0.022
Over $2.5 0.020

International Equity Fund

Assets Annual rate at
(billions) each asset level
First $0.25 0.060%
Next $0.25 0.055
Next $0.25 0.050
Next $0.25 0.045
Next $1 0.040
Over $2 0.035

Aggressive Growth Fund

Assets Annual rate at
(billions) each asset level
First $0.25 0.060%
Next $0.25 0.055
Next $0.25 0.050
Next $0.25 0.045
Next $1 0.040
Over $2 0.035

Growth Dimensions Fund

Assets Annual rate at
(billions) each asset level
First $1 0.050%
Next $1 0.045
Next $1 0.040
Next $3 0.035
Over $6 0.030

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PAGE 35
Global Yield Fund

Assets Annual rate at
(billions) each asset level
First $0.25 0.060%
Next $0.25 0.055
Next $0.25 0.050
Next $0.25 0.045
Over $1 0.040

Income Advantage Fund

Assets Annual rate at
(billions) each asset level
First $1 0.050%
Next $1 0.045
Next $1 0.040
Next $3 0.035
Next $3 0.030
Over $9 0.025

Investment advisory agreements

IDS Life and AEFC have an Investment Advisory Agreement under which
AEFC executes purchases and sales and negotiates brokerage as
directed by IDS Life. For its services, IDS Life pays AEFC a fee
based on a percentage of each Fund's average daily net assets for
the year. This fee is equal to 0.50% for International Equity Fund
and 0.25% for each remaining fund.

AEFC has a Sub-investment Advisory Agreement with IDS
International, Inc. (International), a wholly owned subsidiary of
AEFC.

International's principal place of business is located at IDS Tower
10, Minneapolis, MN 55440-0010, while it also conducts investment
advisory business in London, England. International has had assets
under management since 1981. International determines the
securities that will be purchased, held or sold and executes
purchases and sales for International Equity Fund as directed by
AEFC. For its services, AEFC pays International a fee equal on an
annual basis to 0.50% of International Equity Fund's average daily
net assets.

About American Express Financial Corporation

General information

The AEFC family of companies offers not only mutual funds but also
insurance, annuities, investment certificates and a broad range of
financial management services.

Besides managing investments for all publicly offered funds in the
IDS MUTUAL FUND GROUP, AEFC also manages investments for itself and
its subsidiaries, IDS Certificate Company and IDS Life Insurance
Company. Total assets under management on Aug. 31, 1995 were more
than $124 billion.
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PAGE 36
IDS Life is a stock life insurance company organized in 1957 under
the laws of the State of Minnesota and located at IDS Tower 10,
Minneapolis, MN 55440-0010. IDS Life conducts a conventional life
insurance business in the District of Columbia and all states
except New York.

Other AEFC subsidiaries provide investment management and related
services for pension, profit sharing, employee savings and
endowment funds of businesses and institutions.

AEFC is located at IDS Tower 10, Minneapolis, MN 55440-0010. It is
a wholly owned subsidiary of American Express Company, a financial
services company with headquarters at American Express Tower, World
Financial Center, New York, NY 10285. The Funds may pay brokerage
commissions to broker-dealer affiliates of American Express and
AEFC.

Retirement Annuity Mutual Funds
IDS Tower 10
Minneapolis, MN
55440-0010

Managed by IDS Life Insurance Company
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PAGE 37
Retirement Annuity Mutual Funds
Prospectus/April 30, 1996

This prospectus describes six Funds that receive payments from the
variable accounts of your variable annuity contract. Each of these
Funds has different investment objectives and policies.

IDS Life Capital Resource Fund is a stock fund.

IDS Life Special Income Fund is a bond fund.

IDS Life Managed Fund is a managed fund.

IDS Life International Equity Fund is an international stock fund.

IDS Life Aggressive Growth Fund is a stock fund investing primarily
in common stocks of small and medium-size companies.

IDS Life Investment Series, Inc.
IDS Life Capital Resource Fund
IDS Life International Equity Fund
IDS Life Aggressive Growth Fund
IDS Life Special Income Fund, Inc.
IDS Life Moneyshare Fund, Inc.
IDS Life Managed Fund, Inc.
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PAGE 38
Retirement Annuity Mutual Funds
IDS Tower 10
Minneapolis, MN 55440-0010
612-671-3733
TTY: 800-285-8846
<PAGE>
PAGE 39
Table of contents

The Funds in brief
Goals and types of Fund investments
Manager and distributor
Variable accounts

Sales charge and expenses
Sales charge
Expenses

Performance
Financial highlights
Total returns
Yield calculation
Key terms

Investment policies and risk
Facts about investments and their risks
Alternative investment options
Valuing assets

How to invest, transfer or redeem shares
How to invest
How to transfer among variable accounts
Redeeming shares

Distributions and taxes
Dividend and capital gain distributions
Taxes

How the Funds are organized
Shares
Voting rights
Shareholder meetings
Portfolio managers
Directors and officers
Investment manager
Administrative services agreement
Investment advisory agreements

About American Express Financial Corporation
General information
<PAGE>
PAGE 40
The Funds in brief

Goals and types of Fund investments

Capital Resource Fund's goal is capital appreciation, and it
invests primarily in U.S. common stocks.

Special Income Fund's goal is to provide a high level of current
income while conserving the value of the investment for the longest
period of time. It invests primarily in investment-grade bonds.

Managed Fund's goal is maximum total investment return through a
combination of capital growth and current income. It invests
primarily in stocks, convertible securities, bonds and money market
instruments.