President Obama wants you to start saving money. To do that he has proposed something called "MyRA" which stands for My IRA and it is something that every American should AVOID!
Why? Because it is a bad deal plain and simple. If you start a MyRA account you will be loaning your money to the government for pennies on the dollar. All you will get are the lowest interest rates which right now amount to almost nothing.
Obama is trying to get people to start saving and that is a good thing. He is targeting the uneducated and the undisciplined segments of our society and trying to get them to save at least something every week or every paycheck. But in return.....well, he is giving them very little.
You Need Money In The Stock MarketIn order for your savings to ever amount to anything, you should have at least some of your money in the stock market. Interest rates are so low that they pay you next to nothing and the stock market has, over time, proven to be the best place for a growing retirement account. If you want any decent return on your money, you have to put some of it in stocks.
MyRA doesn't give you that option.
All you get with MyRA is a piddly savings account type return which will get you nowhere. You will really be buying some of America's debt and you can read more about that here. And you won't be getting any tax benefits from it either as you have to put in after tax dollars. The interest you earn is tax free but who cares as that will be so small an amount that it won't matter much.
The most important part is though, that you can't put a dime of your MyRA into stocks. This will only continue the unfortunate fact that poorer people stay poor as they never benefit at all from a rising stock market. Obama's MyRA does nothing to change that.