Among the proposals to assist consumers with saving for retirement, is President Obama’s proposed myRA retirement savings plan. However, experts at the New America Foundation are recommending that some changes be made to improve the effectiveness of myRA.
In a new policy paper, Solving the Retirement Puzzle: The Potential of MyRAs to Build a Personal Safety Net, one recommendation made by New America experts is that myRA be used for both emergency and retirement savings. However, despite the limitations of myRA, New America experts acknowledge that it is the only major initiative to confirm the importance of having flexible emergency savings and building adequate retirement savings.
Says New America in part, “The Obama Administration’s myRA program is designed to facilitate access to a savings vehicles for the mostly low- and middle-income Americans who miss out on current savings opportunities. As currently designed, the program is unlikely to have a significant impact at scale on the long-term prospects of this group of workers. But with certain adjustments and policy reforms, myRAs could facilitate the creation of personal safety nets that would both provide short-term financial stability and lay the foundation for a secure retirement. Short-term, flexible savings are a crucial but overlooked piece required to solve the retirement puzzle.”
New America proposes that the Obama administration make myRAs more accessible by:
- Making myRA available to all employers who would like to participate, regardless of their sponsorship of an existing retirement savings plan
- Market myRA as a flexible savings vehicle, and not just dedicated to retirement savings
- Allow the self-employed to participate in myRA
- Provide for myRA account opening on federal tax forms
New America also proposes that Congress allow employers to automate enrollment into myRA, and that there should be an elimination of asset limits in public assistance programs that deter working families from saving.
Visit the New America Foundation’s website to read the full report, Solving the Retirement Puzzle: The Potential of MyRAs to Build a Personal Safety Net.