Some of you may recall I questioned the need and viability of the myRA program. Now Treasury has decided to close the program because of high cost and low participation. That was obvious from the start, but try and convince those who refuse to balance the real world and human nature with social idealism. More millions wasted.
This should be a lesson for the states now setting up yet more retirement savings programs and adding more costs for small employers, but it won’t. There are plenty of opportunities for those who wish to save for retirement. Too bad we have to make it so complicated.
The government has decided to wind down the myRA program, an Obama-era initiative aimed at small retirement savers.
The Treasury Department cited cost as the reason to end the myRA program. “Demand for and investment in the myRA program has been extremely low,” it said in a statement. “American taxpayers have paid nearly $70 million to manage the program since 2014.” About 20,000 accounts have been opened since 2015, and the program had a total of $34 million in assets.
The program was available to workers with no employer-sponsored retirement plan, such as a 401(k), and with little money to invest. It allowed workers to have part of their pay deposited into a tax-deferred Roth IRA that invests in U.S. government bonds. Workers could start investments with as little as $25 and add payroll contributions as low as $5. Once a worker had accumulated $15,000, she would have to move it to a private-sector Roth IRA.
“The myRA program was created to help low to middle income earners start saving for retirement,” said Jovita Carranza, U.S. Treasurer, in a statement. “Unfortunately, there has been very little demand for the program, and the cost to taxpayers cannot be justified by the assets in the program … We will be communicating frequently with participants to help facilitate a smooth transition to other investment opportunities.”