In his State of the Union address last Tuesday, President Obama introduced a new retirement savings plan called a “MyRA”. Unlike a 401(k), however, MyRA will offer “principal protection” so a saver’s account balance “will never go down,” the White House said. “The product will be offered via a familiar Roth IRA account, and savers will benefit from principal protection, so the account balance will never go down in value. The security in the account, like all savings bonds, will be backed by the U.S. government. Contributions can be withdrawn tax free at any time.”
As mentioned in http://www.accountingtoday.com/news/Obama-Plans-MyRA-Retirement-Savings-Accounts-69455-1.html some concerns exist with this new retirement vehicle. First of all, the President is asking Americans to invest in long-term Treasury bonds when interest rates are at historic lows that may not keep up with inflation. Another concern is the relative ease which those saving can pull their money out. Also, a cost exists to the employers who must set up the plans, but have no incentive to do so.