by Abby W. Schachter
Independent Women’s Forum
March 31, 2014
With half of American households lacking any retirement savings, President Obama has decided to attack the problem by announcing a new government program called My Retirement accounts. Modeled on the Roth IRA, the new MyRAs will allow those who haven’t started saving for retirement to put away as little as $5 every pay period into a portable retirement savings account invested in treasury bonds and guaranteed against losses. While saving for retirement is important, there is little to suggest that a government-run program will be effective in encouraging Americans to save more. MyRAs also could encourage workers to assume that saving as little as $5 a month is sufficient. Finally, Americans don’t just lack retirement savings; they lack savings of any kind. Rather than create a government savings program that duplicates the private market, policymakers should encourage savings across the board and focus on reducing barriers to job creation.

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