Here's how Treasury Secretary Jack Lew explains myRA:
You will be able to start saving with an initial deposit of as little as $25 and contribute as little as $5 each payday. If an employer chooses to participate, contributions are made through automatic payroll deductions, making them hassle-free.The interest rate on myRA is going to be the same as the one paid by the Thrift Savings Plan Government Securities Investment Fund. The TSP itself admits about this interest rate:
There are no fees—100% of any contribution goes into the account and is invested in a Treasury security. That means it will be backed by the full faith and credit of the United States, will earn the same interest rate that is available to federal employees for their retirement savings, and the balance will never go down.
The G Fund is subject to inflation risk, or the possibility that your G Fund investment will not grow enough to offset the reduction in purchasing power that results from inflation
In other words, it's a terrible investment. The US is on the edge of bankruptcy and the only way they can avoid bankruptcy is to print more money. Thus, a loan to the government (which is what this is), and without major protection against inflation, is a terrible idea. And it is going to be run by a crony Wall Street firm. A private-sector money management firm is going to be chosen by the Treasury to run the program.
Think about this.
Do you really want to place your money in the hands of an Obama-Lloyd Blankfein type money management team?
|The President signs the presidential memorandum directing the Treasury to create myRA.|