Real life isn’t always a “Field of Dreams,” where “if you build it, they will come.” Instead, there are times when you build it, and they go “Ho-hum,” and mostly ignore you. So while any effort to encourage increased retirement savings among workers deserves to be applauded — arguing against increased savings is like disputing the value of parenthood and apple pie — it’s hard to see President Obama’s myRA program achieving most of its goals, because once you get past what he described during the State of the Union address, it appears to be a lot of wishful thinking. Let’s do the digging and see why that is. The awkwardly named myRA (rhymes with IRA, as in the individual retirement account it is designed to supplement) was unveiled by President Obama this week as a savings vehicle designed to serve people whose employers don’t provide access to a retirement plan. That’s about half of all workers, mostly the ones who work for small employers that can’t afford to offer a plan. The basic details released to this point make it clear that myRAs will be backed by a security that looks and feels like a savings bond, backed by the government and with the same variable-interest-rate return offered by the G Fund, the Government Securities Investment Fund in the federal employees’ Thrift Savings Plan. (It’s similar to another idea the Treasury has been working on for at least four years now: the R-bond, a retirement product that would let employees direct part of their paycheck toward an investment.) Savers would be guaranteed that the value of their account would never go down; they would pay no fees on the accounts.
(Excerpt) Read more at marketwatch.com ...
