Obama hopes ‘myRA’ will be first step on retirement

WASHINGTON (AP): EVEN PROPONENTS of President Barack Obama’s new retirement savings programme readily concede it won’t be a cure- all for a nation of people who are saving far too little for their golden years. Many Americans won’t be able to participate initially, and those who do, may find the benefits are modest.

Yet, the Obama administration is hoping that the savings programme – dubbed ‘ myRA’ for ‘my IRA’ – will serve as a call to action, spurring Congress to take more sweeping steps to shore up retirement security as company pensions become a thing of the past. Given a presidential boost, like- minded lawmakers are already pushing new legislation to vastly expand the number of Americans who put away cash for retirement.

“This is a small first step,” said Nancy LeaMond, AARP’s executive vice-president. “We think it is starting to generate a debate. Our hope is, there can be action.”

Aiming to help the roughly half of Americans with no retirement plan at work, Obama announced in his State of the Union speech Tuesday that the Treasury would create new “starter” savings accounts. The programme is geared towards low- and middleincome Americans who lack the upfront investment that many commercial IRAs require. Starting with as little as $ 25, savers could invest a little each month in Treasury bonds and then convert the accounts into traditional IRAs once the savings grow.