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myRA retirement account launched today
Old 11-04-2015, 03:16 PM   #1
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myRA retirement account launched today

Is anyone going to invest in this instead of a Roth IRA? Doesn't seem like this is the target group to invest in this. I think it's geared more toward low income people who can't afford to open an IRA that has a $3000 minimum but they want to invest "something". Any takers?

You can now sign up for Obama's myRA retirement account - Nov. 4, 2015
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myRA retirement account launched today
Old 11-04-2015, 03:42 PM   #2
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myRA retirement account launched today

Wouldn't even consider it after seeing how well my government handles other financial matters. Would much prefer to inset with companies with good track records at offering solid products and have a track record of good support for their clients.


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Edit : not a political statement by the way. Just pointing out that I'd prefer to do business with folks like vanguard or fidelity that have excellent track records of customer support and good products.
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Old 11-04-2015, 03:56 PM   #3
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I'll go further and suggest these accounts are immoral. The government is telling low income people to save (that's good) in treasuries (that's really bad).
Granted it's somewhat better than telling them to buy lottery tickets.
Over the long time horizons of a working life treasuries are more risky than stocks because of inflation.
The only game in town is stocks. I would be impressed if they had very low cost entrance into a Vanguard ETF or something like that.
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Old 11-04-2015, 03:57 PM   #4
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Don't really see much point.

Vanguard: $1000 minimum for STAR and Target Retirement
Fidelity: $2500 minimum, waived with $200/mo auto-deposit
Schwab: $100 minimum
Betterment: no minimum, 0.35bp with $100/mo auto-deposit
WiseBanyan: $10 minimum (although I dunno about the viability of their business model)

Online Bank IRA HYS/CD: a lot don't have minimum deposit requirements
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Old 11-04-2015, 04:00 PM   #5
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It seems to be a 'G Fund' clone, and as such, might be a safe place for some of your money. Their web site is a little too glossy and short on technical information though.
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Old 11-04-2015, 04:17 PM   #6
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It seems to be a 'G Fund' clone, and as such, might be a safe place for some of your money. Their web site is a little too glossy and short on technical information though.
Would actually be nice as a stable value fund but Roth only and $15K/30 year max limitation makes it a non-option for my portfolio (I prefer to use my limited Roth space primarily for high growth assets).

Personally, I think increasing the IRA contribution limits to 18K and allowing full deduction for traditional IRA for folks not covered by an employer retirement plan would have been better.
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Old 11-04-2015, 04:23 PM   #7
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I suspect that few folks on this forum would be the targets Obama has in mind with this. In particular I think the target is folks that have no retirement accounts, and following the nudge option this allows you to take money from a tax refund and put it in the myIRA, so you never see it, just like the auto enroll in 401k s and the auto escalation features.
Note that the limits imply low contributions as if you contribute for all 30 years it is 500 dollar max, or at the limits you go for less than 3 years and are maxed out.
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Old 11-14-2015, 09:49 PM   #8
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I hadn't heard of this MyRA until today.
It's intriguing in that it allows non-government employees access to the G-Fund (from the federal TSP program) for the first time. It's a great investment vehicle for its particular purpose. But the $15K limit really limits the attractiveness for all but the smaller/newest saver. And young savers should probably be investing primarily in something else.
Is this a solution looking for a problem? As hnzw_rui notes, there are lots of other places people can open Roth IRAs with very low balances.

Of note: The government has borrowed from the G-Fund in the past when there was a standoff over increasing the debt limit, etc. It has always been paid back promptly. Does the MyRA find favor in the government because it might provide a bit more buffer/slush fund? Anyway, I'd be surprised if it gains much popularity unless it is made more enticing and less restrictive.
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Old 11-15-2015, 07:01 AM   #9
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If I could access the G fund (or equivalent) for my taxable cash and emergency fund, I'd be all over it. I don't see anything compelling about a $15K limit on a retirement account earning 2%, though.
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Old 11-15-2015, 08:29 AM   #10
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Instead of simplifying the existing morass of various retirement accounts each with their own rules on contributions/withdrawls (401k, 403b, 457b, tIRA, Roth IRA, SEP IRA, etc.) they just added another one to the mix. This is supposed to make saving for retirement more straightforward for the Average Joe?
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Old 11-15-2015, 09:19 AM   #11
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I think the MyIRA is designed for small employers who offer no retirement plans, a convenient way to start one through direct deposit/withholding from pay check. It is essentially a Roth IRA but instead of Vanguard as the vendor, it's the US Govt.
And potentially pays better than offered by banks or credit unions. Unlikely for er.org folks, but possibly for teenagers/college students to get started! And those unfamiliar with equity investing.
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Old 11-15-2015, 01:25 PM   #12
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Originally Posted by soupcxan View Post
Instead of simplifying the existing morass of various retirement accounts each with their own rules on contributions/withdrawls (401k, 403b, 457b, tIRA, Roth IRA, SEP IRA, etc.) they just added another one to the mix. This is supposed to make saving for retirement more straightforward for the Average Joe?
+1. The financial lobby is too entrenched to allow the gov't to simply make 2 types of accounts for all to access: pre-tax and post-tax contributions.

Think tying health insurance to your job doesn't make sense? How about the nonsense of tying to your particular employer which of the 10+ different retirement accounts you can contribute to/get benefits from?
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Old 11-15-2015, 01:44 PM   #13
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Instead of simplifying the existing morass of various retirement accounts each with their own rules on contributions/withdrawls (401k, 403b, 457b, tIRA, Roth IRA, SEP IRA, etc.) they just added another one to the mix. This is supposed to make saving for retirement more straightforward for the Average Joe?
+1 Plus such things are near impossible to kill off for efficiency's sake once people have invested into them, even if it's a small number of people.
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Old 11-15-2015, 01:51 PM   #14
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Another example of a huge government trying to overreach it's ability. I predict that hundreds of thousands of unsophisticated savers will enroll because they assume that it is safer than those Wall Street options.
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