Savings accounting

29 January 2014 By Daniel Indiviglio

Making it easier for U.S. workers to sock away money for their golden years is admirable. Many won’t have a buck to invest now and real returns would be 0.4 pct. That’ll change, though. And the project may create a big Treasuries buyer and make Social Security easier to reform.

This content is for Subscribers only

Context News

During his State of the Union address on Jan. 28, U.S. President Barack Obama unveiled a proposal for a new government-administered retirement savings plan.

Under the plan, the U.S. Treasury Department would create “MyRA” accounts, which provide the chance for workers whose employers do not offer a savings plan to participate in the government-backed securities placed in Roth Individual Retirement Accounts. These IRAs take taxed dollars and provide tax-free withdrawals.

Invested principal would be protected and the return would correlate to a variable interest rate based on the average yield of Treasury bonds with four or more years of maturity. The plans will be capped at $15,000, after which time savers can take the account to private-sector plans.

Email a friend

Please complete the form below.

Required fields *