So President Obama introduced this new MyIRA/MyRA program. It is supposed to give working class Americans a chance to save for retirement by allowing people to buy government debt in the form of US bonds with post tax payroll deductions. But rather than provide retirement accounts for working class Americans, it seems like a desperate attempt by the federal government to find a new way of borrowing money at below market interest rates.
This looks a lot like the program the Japanese government introduced 20 years ago to entice the working class to by their goverment’s debt.
This is just the first, visible manifestation of Government take-over of retirement programs in general. Back when the Roth IRA was first offered, I understood why a 30-year-old might use it but it made no sense (cents) for an older person to roll-over his traditional IRA, pay income taxes and then invest the net proceeds after-tax into a Roth IRA. I commented at the time that this was just the first step in Government take over of retirement plans. I further speculated that by the time a person is ready to use Roth IRA money, the Government will have changed the rules yet again and will begin taxing the Roth. Now you’re seeing another step. I predict the next step to be taken will be a mandatory contribution (30% - 40%) of your existing IRA be transfered into Government bonds - for your own financial protection don’tcha know! Ultimately, all your retirement funds will be “managed” by the Government (because we’re too stupid to manage our own financial affairs - only the Government knows how we should invest our funds). Big Government’s intent is always to become even bigger. If you think a $17+ Trillion Debt is large, you ain’t seen nothing yet!
The US census of 1980 1990 2000 and 2010 all indicate that 9 out of 10 Americans retire at or below poverty income levels. Oldguy says that the government thinks we are too stupid to manage our own financial affairs, well I don’t think that we are too stupid but we are not competent. Managing finances in such a way that we are not eatting cat food 10 years after we retire is not something that the typical person who spent all their life learning somthing that is not financial and having to hit it perfectly right the first time (you only retire once) is not possible.
Since companies stopped providing pensions then somebody needs to look out for us. Or we can start collecting recipes for cat chow.
I don’t disagree with your point, but is this really a better or safer program than an IRA or Social Security? Why not encourage people to make voluntary contributions (above the mandatory 7.5%) to Social Security rather than start up a brand new program with myRA?