What are your thoughts on Obama’s new initiative MyRA? As I see it, there are two arguments.
1. It is a tax on poor people because it the investment is unlikely to have returns that exceed inflation. Therefore, it is a silly long-term investment strategy.
2. It is a way to get people to start saving. Yes, the returns aren’t great, but that idea is to get people used to the idea of putting some money from every paycheck aside for the future and eventually, when you hit the $15,000 cap, it starts rolling into a traditional IRA account which has better returns.
I am more inclined to believe the second argument, but do think there might be more effective ways of helping people save.
What are your thoughts?
I hadn't heard about this "MyRA" before this, so thanks for bringing it to my attention. Here are some articles on it: Businessweek, CNN, Forbes, and the Whitehouse Press Release From the White House: "FACT SHEET: Opportunity for All: Securing a Dignified Retirement for All Americans" | Women continue to be less prepared for retirement than men|
Again, wouldn't education be better served before implementing a program? Summary: You should be wary when the government says "we're here to help." Where are their sources; making claims without sources is useless, especially coming from the White house. Businessweek: The myRA Is Good. Don't Stop There Summary: I would say there's just a teensy bit of a big-government slant. CNN: What Americans think about Obama's myRA retirement accounts Summary: Okay article, but who cares what other readers have to say? If I wanted to know, I'd check either the comments section on the website, or on sites such as Reddit, Hubski, or Facebook if I'm truly desperate. Forbes: "myRA Not Needed: You Can Set Up Your Own Retirement Plans Summary: I enjoyed this article. It explains the plan well, and has constructive criticism. The author said it well: From OP: In the end, if things keep going the way they are... I wouldn't say government bonds are as great of an investment as they used to be. What does MyRA achieve that doesn't already exist, or does better than existing options? Why do we need another government program, and how much will this program cost?While Social Security is and must remain a rock-solid.
Debatable, and it didn't help that the money backing it has been pillaged continually. We were on track back when Clinton was POTUS (it was even projected to, if we kept on track, have a huge surplus), but that's clearly not the case anymore. Unless Congress, or the government in general, changes their ways.... I don't see Social Security lasting much longer, unfortunately.fewer than 1 out of 10 workers eligible to contribute to an IRA voluntarily do so
Then maybe it would perhaps be better to include education ("raising awareness") before/whilst this program is being implemented?will propose to establish automatic enrollment in IRAs (or “auto-IRAs”) for employees without access to a workplace savings plan
Ooooo boy, I love it when the government automatically does things for me.proposed to limit contributions to tax-preferred savings accounts once balances are about $3.2 million, large enough to fund a reasonable pension in retirement.
How did they determine that number? Who will determine when that number will change?The population is aging, and on average, Americans haven’t saved enough for their elder years.
Sorry to sound like a broken record, but seriously, education helps; you can't do something you don't know about or how to do.The typical value of 401(k)s and IRAs for workers nearing retirement was about $120,000 in 2010, according to the Federal Reserve.
I'm surprised, they actually cited their source. They're already doing a better job than the White House by doing that simple thing.The president’s newfound reliance on executive orders may be controversial
That's a goddamn understatement.“We are on the cusp of being able to make defined contribution plans work for everyone, but we really have to act differently and think differently, and we really need to get at it in the next five years,”
Then is a government really necessary? The government can force people to do things, but that doesn't mean they'll do it willingly (see: Affordable Care Act)“What’s the downside?” asks Dean Baker, co-director at the Center for Economic & Policy Research
It's a government program.These reforms won’t completely solve the puzzle over how best to ensure retirement income security for all Americans.
Is that really the job of the government?Returns about 2%
Isn't that less than inflation? So the government gets your money (automatically, unless you opt out), and doesn't even cover inflation?"Why would anyone consider giving a broke and bankrupt government any more of your money? That's foolish," said 62-year-old reader Steve Keller.
Smart man.I'm going to be pretty much dependent on Social Security.
Ahh, because isn't that the point of social security? (/s)Riss said they would like the security and slightly higher returns that the government-backed accounts would offer.
The video said the MyRA is investing in government bonds.... can't people just do that themselves?Dave Elwell "(Obama is) making it seem like people can take money and put it in this account and really have something special," he said. "But after inflation, what will that really be worth?"
I enjoy that they put this at the end of the article, leaves the reader to think about it.only 14 percent of businesses employing 100 workers or fewer sponsored some type of savings retirement plan; among employers with one to four workers, only 5 percent offer retirement savings plans.
Surely there exists a better path to fix that than a government program, if that's what Obama is trying to fix/alleviate.workplace retirement savings plans, which is usually the most effective way to save for retirement.
Perhaps that needs to be alleviated, then? If the MyRA is trying to alleviate it, it's not doing a very good job (since it's 2% return, which is shit).savers will benefit from government-backed principal protection, so the account balance will never go down in value
How much will this cost?Savers will earn interest at the same variable interest rate as the federal Thrift Savings Plan (TSP) Government Securities Investment Fund.
Well then, why wasn't that stated (if I missed it, let me know) in the White House release?The Roth IRA Connection. You can currently set up a Roth IRA account with any financial institution. What makes the myRA different?
Good question, the White House release didn't really say.The larger problem is that the retirement system is a sorry, ragged patchwork quilt of plans and programs.
Perhaps fixing this would be better than MyRA, then? While you're at it, fix the tax code too.So rather than dress up yet another retirement account and pretend it’s going to help America’s dismal savings rate, let’s improve upon what we have.
It is a tax on poor people
I thought it was opt-out, though? So the people who don't want it can just opt-out. I mean, this could be an easy way for the government to get free money from people ignorant about retirement. If they're ignorant now, why not take advantage of it to the tune of free money?It is a way to get people to start saving. Yes, the returns aren’t great, but that idea is to get people used to the idea of putting some money from every paycheck aside for the future and eventually, when you hit the $15,000 cap, it starts rolling into a traditional IRA account which has better returns.
Then why not just encourage people to enroll in IRAs with better returns? The government will still have to subsidize peoples' retirements if the MyRA doesn't even cover inflation.but do think there might be more effective ways of helping people save.
Most definitely.