myRA is Here

[whell]

Bypassing Congress, the Treasury has rolled out a new type of IRA that only invests in US Gov't Debt. This plan was announced earlier this year but finally rolled out this month.

https://myra.treasury.gov/

The most accurate - IHMO - description of this plan comes from CNBC:

So here's the irony: The myRA will actually have the working poor financing the government's deficit spending. By creating accounts that invest in a government pool, it's yet another way for the Treasury to raise funds without having to sell bonds in the public markets.

http://www.cnbc.com/id/101396252#.

For savvier investors, such a plan might make some sense as a modest part of a diversified portfolio. Bur that's not how the gov't is marketing this plan. From the myRA web site:

The United States Treasury has designed a new retirement savings option that makes it easy for you to participate, with no minimums, fees or risky investments.

So the gov't is suggesting to individual investors that they should avoid "risky investments" and participate in a myRA. Of course, that's exactly the opposite of what any decent investment adviser would suggest. Some risk in any investment portfoliio is necessary, if for no other reason that investment returns should at least outperform the rate of inflation. With Treasury notes yielding around 2% or less, investors in the myRA will be hard pressed to gain sufficient returns to fund their retirement.

[ebacon]

Is it available to "savvy investors"? My understanding is that the program has an upper income limit for participants. When I read a blurb on the program it struck me as an investment plan for beginners, as in minimum wage earners. The income ceiling was pretty low as I recall.

[whell]

Originally Posted by ebacon

Is it available to "savvy investors"? My understanding is that the program has an upper income limit for participants. When I read a blurb on the program it struck me as an investment plan for beginners, as in minimum wage earners. The income ceiling was pretty low as I recall.

The plan is available to those earning less than $129,000 per year (less than $191,000 per year if for a married couple filing jointly). I don't make nearly that much, but I can balance my checkbook.

[ebacon]

Originally Posted by whell

The plan is available to those earning less than $129,000 per year (less than $191,000 per year if for a married couple filing jointly). I don't make nearly that much, but I can balance my checkbook.

That is substantially higher than I recall. CRS is setting in.

[merrylander]

Truth be known all IRAs are loaded in favor of the administrators.

[Dondilion]

Originally Posted by merrylander

Truth be known all IRAs are loaded in favor of the administrators.

Truth indeed.