Can Obama's myRA Retirement Plan Get Americans to Save?

President Obama says the starter savings plan he unveiled in his State of the Union address—awkwardly named myRA—“guarantees a decent return with no risk of losing what you put in.” He’s right about the protection against losses. But it’s not as clear whether the myRA offers a “decent return.”

The myRA savings account is intended for the roughly half of U.S. workers who don’t have access to employer-sponsored retirement plans. It’s a government-run account that will earn the same fluctuating interest rate as the Thrift Savings Plan Government Securities Investment Fund available to federal employees. Contributions, which will be deducted from after-tax pay, won’t be taxed on withdrawal. The purpose is to get people started on a lifetime of savings. Once an account reaches $15,000 it will be rolled over into a private-sector Roth IRA. The myRA plan is so new that some people in Washington are still pronouncing it like the woman’s name. It’s actually three syllables, a play on “I-R-A.”