The Treasury Department retired the MyRA (My Retirement) Savings Plan. Claiming low demand and costly upkeep – more than 70 million dollars since 2014 – The plug was pulled two years past its date of birth, leaving some participants in dismay.
For those of you who may not be aware, the MyRA was similar to a very limited Roth IRA retirement savings account enacted by Congress in the late 90’s.
While the government reassesses its strategy and tries to come up with alternatives, doubts also begin to surface. Was the initiative flawed from the start? Were American people not smart enough to think of the future or were they just unaware of the program itself? Most importantly, where should we turn to for our retirement needs now?
In this article, we dissect what went wrong and give some of these questions a proper answer. If you fear that your retirement might be hanging in the balance, stick with me, and we will get through it together!
The Weight Of Multiple Shortcomings Ended The MyRA
A government-backed strategy rarely fails on its own. What ultimately brought the MyRA Savings Plan down was a long series of poor choices. Weak marketing, limitations, over-complicated procedures, and an unstable economy all influenced the program, eventually playing a part in its early demise.
Above all, the MyRA lacked the means to provide its users with a valid alternative to other, better known, saving solutions. Extremely similar to a Roth IRA, the MyRA instead required employers – not the actual account owner – to deal with the more technical aspects of its management.
Most job providers, though, did not want to take more responsibilities than what they already had. Perhaps, to avoid having to deal with it, several failed to mention its existence or flat out advised against it. In retrospect, they weren’t completely wrong!
Another major mistake was marketing the savings plan primarily to low-income families. In today’s economy, most Americans struggle to save enough money to withstand minor emergencies. Those who can’t rely on a stable job and worry about making ends meet won’t be able to save for retirement.
Life After The MyRA!
The Roth IRAs remains as a suitable replacement to the MyRA. The Treasury Department is already encouraging citizens to switch over, with a step-by-step system that will guide you through the whole migration process. Your savings won’t be lost.
Two years and millions of dollars later, all that the MyRA initiative managed to leave behind is the foul taste of defeat. We can hope the current events serve as a lesson, teaching the higher-ups to learn from their mistakes, but who is holding their breath?