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Old 04-16-2014, 07:13 AM
 
Location: Great State of Texas
86,093 posts, read 72,622,595 times
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Quote:
Originally Posted by TuborgP View Post
In what asset allocation world is a 22 year old told to put all of their investments in a fund like the proposed MYra? Talk about a self made wealth gap maker! Does the White House understand diversification and age appropriate investments? Hopefully participants will be encouraged to eventually transfer their assets to normal IRA's.
It's not even a good investment for retired folks !

Since inception (1987) it's had average return of 5.54%
It's all non marketable short term Treasuries issued specifically for the G Fund.


https://www.tsp.gov/investmentfunds/...e_G_Perf.shtml
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Old 04-16-2014, 08:08 AM
 
Location: Central Massachusetts
4,800 posts, read 4,861,663 times
Reputation: 6379
Default Missing the point

I know everyone is correct. The investment of Government Treasury Bond Fund is terrible. You wont even keep up with normal inflation. But think on it this way. This is geared to those who are not even putting anything away. Could it be at least possible that the government might start there as they did in TSP and add in the other funds as it starts? Might it be good that at least for some who do not do any savings what so ever something gets started? Might this be a stepping off stone into changing the SS trust fund? I am not a fan of the current administration by any means. I am not a rabid Republican, Democrat, Libertarian. I am something completely different. I can see all view points and wish I could pull all of those people in a room and say let's get something started. The current way is not working any more but we do not have to go drastic either.

I for one at least can say that it is better then nothing. Maybe we can change people's mindset that are just giving up on trying to prepare for the future.
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Old 04-16-2014, 08:09 AM
 
29,837 posts, read 34,924,704 times
Reputation: 11755
A good read on the MyRA by the well thought of financial planner. Michael Kitces:

The New MyRA Roth IRA Proposal - Everything We Know So Far | Kitces.com

Quote:
So why bother? Some government cynics have already noted that the program to 'default' new savers to buy government bonds within a MyRA is 'conveniently' timed to match up with the onset of the Federal Reserve's taper of its own balance sheet purchases (albeit of not exactly the same type of bond). Yet proposals for something like a MyRA as part of a broader approach to establishing automatic enrollment for IRAs goes back years; in fact, President Obama's proposals predate the Fed's QE programs altogether, dating back to part of the proposals in his first budget issued in 2009, which in turn were attempting to build on the successes being seen in the 401(k) environment since auto-enrollment was widely expanded as a part of the Pension Protection Act of 2006. Even then, the default investment was anticipated to be a form of government bonds being labeled the "R Bond" as discussed by Mark Iwry, deputy assistant secretary for retirement and health policy with the Treasury. While the Treasury is empowered to create the R Bond - and just recently it was still being discussed as an option - automatic enrollment in IRAs requires Congressional approval, and thus far there has been no successful legislation to implement it, leading President Obama to look to alternatives.
Lots of info in the blog so if so inclined give it a read and post what you consider to be relevant to your thinking.
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Old 04-16-2014, 08:10 AM
 
29,837 posts, read 34,924,704 times
Reputation: 11755
Quote:
Originally Posted by golfingduo View Post
I know everyone is correct. The investment of Government Treasury Bond Fund is terrible. You wont even keep up with normal inflation. But think on it this way. This is geared to those who are not even putting anything away. Could it be at least possible that the government might start there as they did in TSP and add in the other funds as it starts? Might it be good that at least for some who do not do any savings what so ever something gets started? Might this be a stepping off stone into changing the SS trust fund? I am not a fan of the current administration by any means. I am not a rabid Republican, Democrat, Libertarian. I am something completely different. I can see all view points and wish I could pull all of those people in a room and say let's get something started. The current way is not working any more but we do not have to go drastic either.

I for one at least can say that it is better then nothing. Maybe we can change people's mindset that are just giving up on trying to prepare for the future.
Lots of thoughts along that line in the Kitces link I just posted. Give it a read and share if you want.
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Old 04-16-2014, 08:28 AM
 
Location: Central Massachusetts
4,800 posts, read 4,861,663 times
Reputation: 6379
Quote:
Originally Posted by TuborgP View Post
A good read on the MyRA by the well thought of financial planner. Michael Kitces:

The New MyRA Roth IRA Proposal - Everything We Know So Far | Kitces.com



Lots of info in the blog so if so inclined give it a read and post what you consider to be relevant to your thinking.

Thanks Tuborg. In that post Michael is stating my point. Yeah it isn't a big deal in the grand scheme of things. It doesn't make a whole lot of money. It does at least go towards a beginning. Where there is nothing now we can at least make a start in a direction.
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Old 04-16-2014, 08:44 AM
 
29,837 posts, read 34,924,704 times
Reputation: 11755
Quote:
Originally Posted by golfingduo View Post
Thanks Tuborg. In that post Michael is stating my point. Yeah it isn't a big deal in the grand scheme of things. It doesn't make a whole lot of money. It does at least go towards a beginning. Where there is nothing now we can at least make a start in a direction.
Lots of good stuff in the link to chew on, glad you found some. You might want to share for those not as inclined to read.
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Old 04-18-2014, 06:22 AM
 
159 posts, read 105,676 times
Reputation: 38
Quote:
Originally Posted by golfingduo View Post
Unveiled this January in the President's "State of the Union" speech is a new Roth style IRA. The hope is that those who don't save enough or dont have the income will have a new option. Please read the below article.

MyRA Plans: New Retirement Savings Option for Some - WSJ.com


I am no fan of the president. I voted for the other guys. Still we have to move on and live with the choices we as a nation make. Anyway the reason I posted this is I would like to hear some of your opinions. Bear in mind that most here on this particular forum are more aware of the consequences of non-action when it comes to planning for retirement. That is why we came here. One to learn new tricks and two to pass on the tricks and experiences we have.



I took the liberty of pulling out a quote from the piece. As I said please read the entire article but the chunk I quoted here is the meat and potatos of the "myRA". Though it doesn't make a lot of money the G-fund is a better paying account over a typical savings or even CD's.

I am in the TSP where that fund is coming from. At my juncture in life I have begun putting some of my savings into that so that I at least have a baseline of money with which to call safe. I came to this forum a year or two ago and then began to impliment some of the suggestions and good ideas that I found here. To those that have helped thank you.

Anyway I don't see how it will bring in more money unless they are planning on attaching it to some of the FICA taxes. I wouldn't mind seeing something like that implimented where those who are not saving or saving enough can at least have something that they can take with them.

It is kind of funny that the Democrats cried foul over mentions of moving gradually to a payer system that will help people lean less heavily on SS and more into giving a person more responsibility for their own retirement program. Having one fund is a sad limitation but when we first implemented the TSP there were only 3 choices. Now there are 10 options for individuals. I am an advocate of giving access to investors to the funds we have in TSP.

I found this after I posted this thread. A retirement tool for beginners: Tim Decker | PennLive.com

Tim Decker seems to agree with me. I hope people will read this as well.
Tim's article fails to see the problem with targeting these products to "lower- and middle-class people" - these are the worst audience for them.

These products have two problems. These investments are after-tax. At this point they are paying zero on their investment earnings. Tax rates can't go down from zero. These are the last people on earth that should be locking up savings in government securities. Statistically the worst 40 year rolling-average of the S&P is about 3-4% real. The MyIRA's current return is closer to 1. The Administration put more thought into a catchy-name than how savings function in a person's life.

You can't have anyone opt-out of FICA. Every penny today is used to pay existing retirees. That math never changes.
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Old 04-18-2014, 06:25 AM
 
71,957 posts, read 71,997,171 times
Reputation: 49523
a small savings even at zero return is still better than many with little wealth can do on their own .
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Old 04-18-2014, 06:30 AM
 
159 posts, read 105,676 times
Reputation: 38
Quote:
Originally Posted by golfingduo View Post
Unveiled this January in the President's "State of the Union" speech is a new Roth style IRA. The hope is that those who don't save enough or dont have the income will have a new option. Please read the below article.

MyRA Plans: New Retirement Savings Option for Some - WSJ.com


I am no fan of the president. I voted for the other guys. Still we have to move on and live with the choices we as a nation make. Anyway the reason I posted this is I would like to hear some of your opinions. Bear in mind that most here on this particular forum are more aware of the consequences of non-action when it comes to planning for retirement. That is why we came here. One to learn new tricks and two to pass on the tricks and experiences we have.



I took the liberty of pulling out a quote from the piece. As I said please read the entire article but the chunk I quoted here is the meat and potatos of the "myRA". Though it doesn't make a lot of money the G-fund is a better paying account over a typical savings or even CD's.

I am in the TSP where that fund is coming from. At my juncture in life I have begun putting some of my savings into that so that I at least have a baseline of money with which to call safe. I came to this forum a year or two ago and then began to impliment some of the suggestions and good ideas that I found here. To those that have helped thank you.

Anyway I don't see how it will bring in more money unless they are planning on attaching it to some of the FICA taxes. I wouldn't mind seeing something like that implimented where those who are not saving or saving enough can at least have something that they can take with them.

It is kind of funny that the Democrats cried foul over mentions of moving gradually to a payer system that will help people lean less heavily on SS and more into giving a person more responsibility for their own retirement program. Having one fund is a sad limitation but when we first implemented the TSP there were only 3 choices. Now there are 10 options for individuals. I am an advocate of giving access to investors to the funds we have in TSP.

I found this after I posted this thread. A retirement tool for beginners: Tim Decker | PennLive.com

Tim Decker seems to agree with me. I hope people will read this as well.
Quote:
Originally Posted by mathjak107 View Post
a small savings even at zero return is still better than many with little wealth can do on their own .
Actually it is not. The government already subsidizes retirement savings for lower income people. In a worst case, these people get into this savings program and subsidize consumption with credit cards. What is the point of saving at 1% real, while you have a auto loan that costs 10% real.
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Old 04-18-2014, 06:34 AM
 
71,957 posts, read 71,997,171 times
Reputation: 49523
because it is still 1% more than they would have other wise. you need to split the ole balance sheet and seperate expenses vs assets.

folks need some means of saving something regardless because unless it is right out of their checks they will not even do that.

they will always owe money but bankruptsey is an option too.

fidelity saw balances jump big time during the lost decade even with near zero gains just because people were still having money put in their 401k accounts .


true they may have been running up debt but that is a seperate issue. they would never have that savings had they not had it on auto pilot.

i say if they can save a few bucks even near zero than it is a step in the right direction.
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