Another liberal idea hits the wall of reality; myRA goes bust

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.”



  1. Betamax, Edsel, New Coke and … now MyRA Joins An Elite Class of Marketing Failures

    When announced in the 2014 State of the Union, and launched less than three years ago in December 2014, the “My Retirement Account” or “MyRA” was touted by the U.S. Department of the Treasury as “A Simple, Safe, Affordable Retirement Savings Account.” The announcement promised “… a new retirement savings account for individuals looking for a simple, safe, and affordable way to start saving.“ MyRA would feature – no minimums, no fees (taxpayer funded), a single government-backed investment, portability, and, somewhat inconsistent with saving for retirement, tax free withdrawals of contributions at any time and a cap on the maximum accumulation of $15,000.

    Only 20,000 – 30,000 Americans (depending on press reports) had enrolled and contributed (up to) $34MM while the federal government spent $70+Million of taxpayer dollars to implement and maintain the program. Treasury confirmed it would terminate the program because of the ~$10MM ongoing annual cost. See:

    So, let me get this straight. We spent $70MM to encourage 30,000 or so Americans to each contribute about an average of $1,100 – of which a considerable amount has
    already been withdrawn.

    Something wrong with the alternative of just giving the next 30,000 Americans $1,100 while pocketing $36MM in savings for taxpayers?

    What could have been done differently to make MyRA successful? MyRA was probably a success for the 20,000 – 30,000 individuals who signed up. Many saved monies that they might otherwise have spent. And, hopefully, when MyRA closes down, they will not use the termination of the MyRA program as an excuse to withdraw monies – leakage. However, if success is defined as widespread use, MyRA was never likely to succeed.

    What might folks with no plan at work do given this option going away?

    · MyRA was envisioned as part of a solution to America’s retirement “crisis”. Much like Health Reform, many federal government officials believe the crisis is/was one of “access” or “coverage”. However, prior to the passage of Health Reform, almost all Americans had access to health coverage. Some believe they lacked “effective access” – they didn’t want to pay what coverage cost. Most Americans felt (and still believe) they pay too much. However, Census Bureau studies showed that 70+% of Americans who were uninsured in 2009 had sufficient income to purchase health coverage (earnings > $25,000).

    · MyRA is an “access” or “coverage” solution – structured as a Roth IRA. However, every American wage earner has had access to a viable retirement savings solution for the last 35+ years – it is called the Individual Retirement Account or IRA. Almost all Baby Boomers who have consistently contributed the maximum to an IRA since 1982 (the past 35 years) and who continue IRA contributions up to or beyond their Social Security Normal Retirement Age will generally succeed in financial preparation for retirement. So, there hasn’t been a retirement savings “access” or “coverage” “crisis” since at least 1982. Similar to health care, America’s retirement “crisis” is/was not one of “access” or “coverage”, but one of prioritization.

    · Again, all workers, whether or not they have access to an employer-sponsored plan, can continue saving in an IRA. The few who participated in MyRA should consider a direct transfer of IRA monies – perhaps to the institution where they do their banking. Then, they might consider constructing an automatic savings solution – instruct the bank that receives their paycheck to automatically move a portion of those monies to an IRA. This could be a different route to the same (perhaps a better) retirement savings solution.


  2. I never understood the MyRa either. Go back to when I first started working maybe it would have worked because the lack of low cost investment options. But with the Internet, access and broker fees are low to nothing. Even if you are unable to afford a computer with an Internet connection, there is always a bank. These people just will not save money or can’t save money so I do not know how it was going to help.

    But face it, today the government makes it very hard to buy even US Savings bonds without an account with the Treasury in the age of computers to save money. Remember when payroll deductions was an option?

    The money they used on MyIRA should have been spent on education on how and why to save for retirement. They should have raise the limits on IRAs to match what you could put into a 401K not that these people could have hit those limits. They could have educate people on how to buy index stock funds for $8 a trade and as little as $100 and pay less in capital gains tax than in income tax. But the government thinks that the people are too stupid. No they are too lazy or busy to learn what they need to do, and the government will provide for them. Why save at all, they are all entitled to social security and Medicare anyway.


  3. I view these programs like MyRA and others as a feel good jobs program for government employees. Low income invest in retirement with what? High rents, utilities, insurance, food bills, eg. keep many from having anything left to save for anything.


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s