EXCERPT—--the WH wants you to consider a retirement plan that will invest in nothing but US government debt. Any financial professional who advised this—would be sued for malpractice. But asset allocation is merely one of the problems with the new “myRA” fund rolling out this month.
A form of Roth IRA that allows people to save after-tax dollars and watch them grow tax-free until retirement, the new myRA offers a single investment option. It’s a private version of the G Fund that is available to federal workers and has lately been delivering annual returns of about 2% on its portfolio of Treasury securities.
Readers will recall Obama’s announcement in January’s SOTU address.....said he would direct the Treasury to create this new retirement plan, which was puzzling because such plans are normally created by law, not Presidential order. Treasury is now offering the accounts and has hired Texas-based Comerica to manage them with a partner -----Fidelity National Information Services. But the executive branch received no new authority from Congress to launch the program.
Treasury is funding the program out of its "Bureau of the Fiscal Service" budget...... an assertion that existing law allows this part of the Treasury to hire financial agents as part of its mission to efficiently finance the federal government.
The subsidies are likely to be small at first, but the history of government programs is that they expand over time......if such a subsidy scheme can be enacted administratively, does anyone think this will be the last time such power is exercised? New investors should be encouraged to consider ways to build wealth beyond simply lending money to the feds. And if politicians want taxpayers to support another retirement program, they should do so through law, not White House whim.
(Excerpt) Read more at wsj.com ...
