The Trump administration is winding down an Obama-era program designed to make it easier for lower-income Americans save for retirement.
The myRA program was supposed to offer a “safe and affordable” way for people who didn’t have a workplace retirement plan to save for the future. Participants signed up to have contributions withdrawn directly from their paychecks or bank accounts, which would then be invested in low-cost, risk-free government bonds. But a recent Treasury Department review determined the program is not “cost effective.”
Median myRA account balance: $500
Only 30,000 people have opened myRAs since the program launched in 2014. Just 20,000 people have contributed money to their accounts, which have a median balance of $500. So far, the government has spent almost $70 million to manage the little-used program.
“The myRA program was created to help low to middle income earners start saving for retirement. Unfortunately, there has been very little demand for the program, and the cost to taxpayers cannot be justified,” U.S. Treasuer Jovita Carranza said in a statement. “Ample private sector solutions exist,” which already meet the needs of savers, according to Carranza, limiting the appeal of the myRA.
The announcement of myRA’s impending death is bad news for Americans who signed up for the retirement saving plan. But there’s no reason to panic. Although this specific program is ending, there are still other (and maybe better) ways to save for retirement if your employer doesn’t offer a workplace retirement plan.