There’s something awfully suspicious about this newfangled “myRA” everyone keeps talking about.
They say it’s “new” and desperately needed by the thousands of workers not currently covered by an existing corporate retirement plan.
Of course, that’s the government talking.
Experienced financial professionals, on the other hand, suggest the myRA is not as unique as its creator claims.
Still, that’s not what’s fishy (OK, maybe it is, but I’ll leave that part of the discussion for next week).
Here’s what keeps gnawing at me.
Let’s say you’re a retirement specialist working for a regulated firm. A client comes into your office.
He wants to set up a retirement plan. His employer doesn’t offer one, so he’s figuring he needs to take responsibility for his own retirement savings program.
You have several options to choose from, all of which the client qualifies for. You scan your list, and the plan you recommend has the following characteristics:
1) The client can only save a maximum of $15,000 – that’s in total, not just one year;
2) The client is limited to only one investment option;
3) That investment option is a risk-less (ergo, low return) fixed income security;
4) Your firm underwrites and distributes those securities;
5) The retirement plan itself is a product created by and distributed by your firm.