Obama's "myRA" Proposal - Your Thoughts?

[Hayabusa Rider]

He can say anything he wants, he's addressing a non-existent problem. Like I said, there are plenty of savings and investment options. That's not why people aren't doing it.

For the tiny percentage of people that save (never mind invest) they can almost certainly make do quite well with existing options. I'd rather the government focus on ACTUAL issues.

I don't know how much time you've spent dealing with the public, but a great many I know have no idea what they can and cannot do about retirement. It's like working with a computer. Most people have no idea nor do they want to know how to effectively manage a desktop or software suite regardless of income. They want a button that turns it on. They want to click on something have it start, use it, close it and turn off the computer. That's how people work in the real world. "Options" to them are a disincentive.

This is something trivial in the grand scheme of things, and while I'd like the government to do a great number of things, starting off with a revamping of itself, none of what you say you want is material to this in any sense. If you don't want people to have a simpler option that's fine however that's all there is to it. Any other issue is not going to be done better or with more attention because of this. Nothing.

 

[s0me0nesmind1]

I don't know how much time you've spent dealing with the public, but a great many I know have no idea what they can and cannot do about retirement. It's like working with a computer. Most people have no idea nor do they want to know how to effectively manage a desktop or software suite regardless of income. They want a button that turns it on. They want to click on something have it start, use it, close it and turn off the computer. That's how people work in the real world. "Options" to them are a disincentive.

This is something trivial in the grand scheme of things, and while I'd like the government to do a great number of things, starting off with a revamping of itself, none of what you say you want is material to this in any sense. If you don't want people to have a simpler option that's fine however that's all there is to it. Any other issue is not going to be done better or with more attention because of this. Nothing.

Like I said in the OP - I TOTALLY understand where you are coming from where the general person needs simplicity for retirement accounts.

But guess what? If your retirement account consists of treasury bonds when it's time to retire... I got some bad news for you.... :whiste:

 

[Thump553]

I admit to not knowing even the broad terms of this proposal. Frankly even if the proposal was tremendous, a win-win all around it is an absolute certainty that the GOP would fillibuster it to death merely because Obama proposed it. That is a cold hard fact of Washington politics today-Congress is useless except as a doorstop (and too expensive for that purpose and not much good at that anyway).

Texashiker raises some good points but the real hold back to most people investing, or investing more, in ANY type of retirement plan is thier financial inability to do so.

 

[boomerang]

Keep the government out of the program. My wife managed a small business for an absentee owner. The business had eight employees. She was able to set up voluntary IRA accounts for them with payroll deduction and a company match. The government doesn't have to coordinate this, they don't have to have their fingers in it. If they want to mandate that all companies offer it, and they can actually mandate that (and these days, what can't they) then fine. It may be a great way to get people used to saving. The .gov involvement should be miniscule.

 

[boomerang]

We CAN fix that by fixing our education system and instead of requiring Physical education and electives for 4 years in high school have a mandatory year of Finance 101. Is that too much too ask?

I think having mandatory finance courses at the HS level is an excellent idea. It should be a required part of the curriculum across the nation.

 

[hal2kilo]

Since the company changed over to Fidelity I've have my contribution as 75% to their 2025 fund and 25% to the stable fund.

What fund would be their "stable" fund. I have Fidelity and they don't seem to have a plain money market fund to park my investmnts in to ride out the dips (like, oh, now).

 

[Mursilis]

If the govt. wants to do something like this, they should just model it after the Thrift Savings Plan (www.tsp.gov) offered to federal workers. That's a great plan, and it's focused more on returning value to investors and less on fattening Wall Street.

 

[Mursilis]

Also, sadly, there is little evidence that financial education helps people make better money decisions.

I've seen studies on this topic, and sadly, you're right. Education can give a person the knowledge to make sound financial decisions, but not the desire.

 

[boomerang]

What fund would be their "stable" fund. I have Fidelity and they don't seem to have a plain money market fund to park my investmnts in to ride out the dips (like, oh, now).

They do but it must not be part of your plan.

 

[Londo_Jowo]

What fund would be their "stable" fund. I have Fidelity and they don't seem to have a plain money market fund to park my investmnts in to ride out the dips (like, oh, now).

It's sponsored by the company for whom I work.

 

[Mursilis]

Basically everyone should invest in index funds unless you have some extraordinary reason not to.

Other people invest for a living, you do not. They will almost certainly be better than you at it. Don't play their game.

Don't most studies show that the majority of "professional" investors fail to beat the indexes over time? It seems that what most financial pros are good at is fleecing the unsophisticated investor.

 

[werepossum]

Don't most studies show that the majority of "professional" investors fail to beat the indexes over time? It seems that what most financial pros are good at is fleecing the unsophisticated investor.

Last study I saw said 97% of managed funds do not outperform index funds.

I think this is just the camel's nose. By itself it offers little, but later on it can become another give-away as government puts other people's money into your account.

 

[Zorba]

I think having mandatory finance courses at the HS level is an excellent idea. It should be a required part of the curriculum across the nation.

I 100% agree with this. I work with all engineers and it is insane how little they know about anything to with finance, investing or taxes.

 

[boomerang]

I've seen studies on this topic, and sadly, you're right. Education can give a person the knowledge to make sound financial decisions, but not the desire.

But people should still be exposed to it. Obviously we can't control every facet of a person's behavior. We can teach them right from wrong but we can't control what they do with that information.

A story or maybe stories.

I had co-workers that were borrowing from their 401(k) accounts to buy motorhomes and even their cars. I had co-workers that stopped their contributions to their accounts to be able to afford to buy "toys". Four wheelers, snowmobiles, boats, etc. We had a comptroller at the plant I worked at that told me he couldn't retire because the pension he would receive wouldn't cover his credit card payments. Think about that one for a while. Scary.

There will always be idiots in this world.

 

[Wreckem]

If the govt. wants to do something like this, they should just model it after the Thrift Savings Plan (www.tsp.gov) offered to federal workers. That's a great plan, and it's focused more on returning value to investors and less on fattening Wall Street.

Umm that is what the MyRa pilot program is being modeled on. And MyRa is aimed at people who don't already have employer based options.

Not sure if its going to do anything significant.

 

[hal2kilo]

It's spon

​

sored by the company for whom I work.

See thats the pro blem with these plans even when they are managed by the same investment compnies. People do not have the same choices. So when some of these posters on here glibly say well just switch to such and such and stop whinig. They just don't have even similar options.

All I know is the shits heading south again! Fuck!

 

[Wreckem]

Is Wall Street going to get any action out of this like 401K's or IRA's? If not, it's not going to happen.

Probably not. There is only one investment vehcile. A government fund modeled after the federal TSP. I believe it will be fee free just like TSP.

 

[Wreckem]

Clearly an example of someone that needs a finance class.


The default investment is federal government bonds. Yes, it is a "guaranteed" investment that can't lose money, because the only way to not get your interest is if the government collapses. If you think you're ever going to retire or get ANYWHERE NEAR retirement funds with crap interest of government bonds you're out of your mind.





From what I understand, it will be much like today's IRA in that you will be able to choose a few options in investment (we don't know what those are or will be yet). What we do know is the DEFAULT investment that most will not notice or not know how or what to change, which is government bonds.

There is only one MyRa investment vehicle. It will be a federal fund modeled after the federal TSP. The only way to invest in something else is to roll the contributions into another account.

Its a safe investment. You won't get rich or have enough to retire on. If you maxed it out for 30 years, at the average TSP rate, you'd have like $700k in tax free savings. That beats the pants off of most peoples retirement savings. That said I don't think most people can max out contributions every year. So I am not entirely sure of the point of this program. Unless it is aimed at 16-21 year olds.

 

[glenn1]

First and foremost take it for what it is: The default action of the myRA program will buy treasury bonds. What that is is obvious -- it's a scumbag way of getting people to give the government more money. Fin. It's taking advantage of people who don't look at their paycheck options and pulling directly from their paychecks.

Yes, it's an obvious conflict of interest and completely self-serving of the government to require purchase of Treasury securities in an account like this. Meanwhile, yes anything which allows another avenue for Americans to save for retirement is a good thing, even if better options could be made available for savers. And yes, it would be even better if the government allowed people's Social Security tax withholdings designated as contributions to these MyRA accounts, but hell will freeze over multiple times before Uncle Sam ever gave people ownership interests in "their" social security contributions.

 

[PrinceofWands]

I don't know how much time you've spent dealing with the public, but a great many I know have no idea what they can and cannot do about retirement. It's like working with a computer. Most people have no idea nor do they want to know how to effectively manage a desktop or software suite regardless of income. They want a button that turns it on. They want to click on something have it start, use it, close it and turn off the computer. That's how people work in the real world. "Options" to them are a disincentive.

This is something trivial in the grand scheme of things, and while I'd like the government to do a great number of things, starting off with a revamping of itself, none of what you say you want is material to this in any sense. If you don't want people to have a simpler option that's fine however that's all there is to it. Any other issue is not going to be done better or with more attention because of this. Nothing.

While what you say is likely true (after all, people are stupid) I don't think it plays into this in any measurable way. I think most of it (nearly ALL of it in fact) is not wanting to save/invest, or not having the money to save/invest. I don't think it has anything to do with options, or ease, or understanding.

However, that's merely my opinion, and you're welcome to feel differently. This thread asked for our thoughts. I gave mine. In a nutshell it's "I wish the government would focus on things that are actually significant problems."

 

[QuantumPion]

That is why I give my money to a 401k where professionals are supposed to invest it and make me money.

One company I worked for, some people from the 401k company visited the employees and tried to explain why our 401k was losing so much money.

One of the employees stayed up on the stockmarket and had his own investments.

The employee countered the people from the investment company saying if you had invested into Coke or Exxon we could have had a nice return. This was back in 1993 and 1994. The company refused to explain why they were losing money when the stock market was up 12%. The people from the 401k refused to answer any detailed questions about where the money was invested and why they were losing money.

To me the 401k market is a scam or a gabble at best. You can lose money and nobody is held responsible. You money is at the whelm of whatever investment the firm wants to make. If you lose money, too bad.

Who did you work for, MF Global under Jon Corzine lol? Just because you got scammed doesn't mean the entire stock market trading system is a scam. Gambling necessarily means a zero-sum game, where one person wins and one person loses. The stock market involves risk but it is not gambling by any means.

 

[Mursilis]

But people should still be exposed to it.

It's not like this information isn't out there. Do we really need a whole course to teach people it's a good idea to save for a rainy day? That used to be common sense!

Obviously we can't control every facet of a person's behavior. We can teach them right from wrong but we can't control what they do with that information.

A story or maybe stories.

I had co-workers that were borrowing from their 401(k) accounts to buy motorhomes and even their cars. I had co-workers that stopped their contributions to their accounts to be able to afford to buy "toys". Four wheelers, snowmobiles, boats, etc. We had a comptroller at the plant I worked at that told me he couldn't retire because the pension he would receive wouldn't cover his credit card payments. Think about that one for a while. Scary.

There will always be idiots in this world.

And I know similar people, including family members. But now we as a culture have embraced the YOLO ethos, and no one cares about planning for the future. Like I said, you can teach people how to make smart financial choices, but you can't make them want to.

 

[s0me0nesmind1]

It's not like this information isn't out there. Do we really need a whole course to teach people it's a good idea to save for a rainy day? That used to be common sense!



And I know similar people, including family members. But now we as a culture have embraced the YOLO ethos, and no one cares about planning for the future. Like I said, you can teach people how to make smart financial choices, but you can't make them want to.

Quoted for truth.

This YOLO shit is going to cause the next catastrophic bubble. I just hope it doesn't occur when I'm about to retire

 

[s0me0nesmind1]

There is only one MyRa investment vehicle. It will be a federal fund modeled after the federal TSP. The only way to invest in something else is to roll the contributions into another account.

Its a safe investment. You won't get rich or have enough to retire on. If you maxed it out for 30 years, at the average TSP rate, you'd have like $700k in tax free savings. That beats the pants off of most peoples retirement savings. That said I don't think most people can max out contributions every year. So I am not entirely sure of the point of this program. Unless it is aimed at 16-21 year olds.

Think learning about myRA is going to scare people? Show them a rollover form to a traditional IRA and it would scare the living shit out of them

 

[senseamp]

This is stupid. Why do we need these private retirement accounts? We have Social Security and SSI. Seems like a way to expose poor people's money to Wall Street scams.