In his 2014 State of the Union speech, President Obama announced the creation of the MyRA.
Let’s do more to help Americans save for retirement. Today, most workers don’t have a pension. A Social Security check often isn’t enough on its own. And while the stock market has doubled over the last five years, that doesn’t help folks who don’t have 401ks. That’s why, tomorrow, I will direct the Treasury to create a new way for working Americans to start their own retirement savings: MyRA. It’s a new savings bond that encourages folks to build a nest egg. MyRA guarantees a decent return with no risk of losing what you put in. And if this Congress wants to help, work with me to fix an upside-down tax code that gives big tax breaks to help the wealthy save, but does little to nothing for middle-class Americans. Offer every American access to an automatic IRA on the job, so they can save at work just like everyone in this chamber can…
The MyRA was supposed to help Americans save for retirement by
allowing forcing them to put money in an account that would be used to purchase U.S. government bonds. Here’s my take on it from 2014:
Mr. Obama unveiled his plan for these financial vehicles that will supposedly help Americans save for their retirement. This is just another variation of the Government Retirement Account that I discussed here, only it sounds like setting up the accounts and making contributions is voluntary for the MyRA (for now). The way it will work is you will put your money in the account and the account manager will use that money to buy government securities. Heck, somebody has to because the Chinese aren’t buying them anymore. Of course, it would be easier for Americans to save for retirement if they weren’t paying out over half their incomes to pay taxes.
The problem is, the MyRA accounts weren’t working as advertised. They weren’t helping people save for retirement, in part because they offered investors a measly 1.5% return. And they actually cost taxpayers millions of dollars:
Shockingly, as the New York Times points out today, the accounts turned out to be a massive disaster costing taxpayers $70 million, or roughly 2x the amount of money that was invested in the 20,000 accounts that were actually opened and funded.
Luckily for all Americans, this problem has been solved by President Trump…forever:
…the Trump administration has just announced that the program was axed last Friday.An Obama-era program that created savings accounts to help more people put away money for retirement is being shut down by the Treasury Department, which deemed the program too expensive.
The 30,000 participants in the program, known as myRA and intended for people who did not have access to workplace savings plans, were sent an email on Friday morning alerting them of the closing. Participants were informed that they could roll the money into a Roth individual retirement account, the Treasury Department said.
If all President Trump accomplishes is rolling back as many of these Obamanations as possible and building the wall, he’ll go down in history as one of the greatest ever.