The problem with the MyRA proposal is that the returns generated by the account will be so low that in most cases it won’t provide Americans with a reasonable nest egg for retirement
New York, NY (PRWEB) January 30, 2014
On January 28, 2014, in his State of the Union address, President Barack Obama indicated that he is directing the Treasury Department to create a new type of retirement savings account for millions of Americans that would include a government guarantee. These investments, which Mr. Obama called "myRAs," would serve as a type of starter retirement savings account for millions of Americans. The accounts, called "myRAs," would be structured like savings bonds and the investments would be backed by the federal government. Because the investments would be structured like savings bonds, there would be principal protection, meaning the account balance couldn't go down. According to Adam Bergman, a tax partner with the IRA Financial Group, "The White House didn't offer detailed information of how the retirement account would be structured, but indicated it would be relatively low risk, meaning the returns would also be fairly low."
"The problem with the MyRA proposal is that the returns generated by the account will be so low that in most cases it won’t provide Americans with a reasonable nest egg for retirement," stated Adam Bergman. According to Mr. Bergman, "It is believed that the investments under the myRA proposal would offer the same variable interest-rate return as the benefit federal employees get when they enroll in the Thrift Savings Plan Government Securities Investment Fund, which produced an annual return of 1.47% in 2012."
"The myRA accounts would be geared toward to people who are just starting to save for retirement, however, those same people would be better off investing in a Traditional or Roth IRA where they have a wide variety of investment options, such as stocks, mutual funds, gold, and even real estate," stated Mr. Bergman. "With the S&P up nearly 30% in 2013, being forced to invest in U.S. Government Bonds, which lost 2% in 2013 does not seem like a smart way to help people better save for their retirement," stated, Mr. Bergman.
According to Mr. Bergman, "The MyRA retirement account, which the White House plans to create the accounts through an executive action, meaning it wouldn't need congressional approval, is akin to forcing Americans to purchase Government Bonds and limit their investment options. The lack of retirement savings now is not the result of inadequate retirement account options, but a by-product of stagnate wages and a lack of education on the benefits of tax-deferral or tax-free retirement growth."
The IRA Financial Group was founded by a group of top law firm tax and ERISA lawyers who have worked at some of the largest law firms in the United States, such as White & Case LLP, Dewey & LeBoeuf LLP, and Thelen LLP.
IRA Financial Group is the market's leading self-directed Solo 401(k) Plan provider. IRA Financial Group has helped thousands of clients take back control over their retirement funds while gaining the ability to invest in almost any type of investment, including real estate without custodian consent.
To learn more about the IRA Financial Group please visit our website at http://www.irafinancialgroup.com or call 800-472-0646.