Goodbye, myRA! We hardly knew you.

Of course, that could have been part of the problem. Too few people knew what it was or trusted it, so they refused to give it a try.

In 2015, President Barack Obama rolled out myRA, which offered Americans without access to a 401(k) or similar retirement savings account a way to have funds automatically deducted from their paycheck and rolled into an individual retirement account.

At the end of July this year, the Treasury Department announced that it was eliminating myRA due to its high cost of operation and lack of interest. Since the launch of the service, only 30,000 people participated, contributing $34 million.

But while myRA was less than perfect, it does bring up a key problem across America…

The Problem for Every Generation

Americans are horrible savers. I’ll admit that it’s something that I’m not great about at times. For many Americans, it’s hard to put money away for something that’s 20, 30, even 40 years down the road when they are struggling to pay rent or other bills.

Franklin Templeton Investments reports that 40% of millennials have no retirement strategy in place. This is the same generation that is struggling under the weight of school loans, a weak job market and slow wage growth.

But it’s not just millennials who are unprepared for retirement. The Insured Retirement Institute reports that 54% of baby boomers have no retirement savings, and 82% of baby boomers have underestimated the percentage of their income they will need to pay for health care during retirement.

Don’t forget to add in that there is a growing pension problem that could leave many people running far shorter than they expected when it comes time to retire.

This retirement shortfall is forcing many states to help fill the gap that the federal government can’t.

Filling the Gap

The U.S. Census Bureau reveals that only 14% of U.S. employers offer a 401(k) or similar savings program. That leaves far too many Americans without an easy way to save money for their retirement.

As a result, Oregon has started a pilot program called OregonSaves. The program requires employers to sign up workers for automatic payroll deductions, which are put into a Roth IRA. The worker can opt out of the program, but Oregon is attempting to fill the gap where companies can’t afford to provide a 401(k).

And Oregon isn’t the only state. Currently, Illinois, Maryland, Connecticut and California are in the process of implementing similar strategies. In fact, since 2012, 40 states have implemented, researched or considered legislation to establish state-facilitated retirement savings programs.

While the states are still working the bugs out of these programs as they roll them out and continue testing, the key takeaway to remember is that it is critical to start saving for your retirement, even if it’s just a small amount every month.

The First Step

Retirement is supposed to represent your “golden years,” a period of relaxation and happiness after a lifetime of hard work and struggle. The last thing you want as you enter this period is having to worry about getting your retirement savings or even Social Security benefits to stretch.

A 2014 CBS News poll revealed that 48% of workers don’t expect to retire by age 65, up from only 33% in 2005. What’s worse, 22% of Americans don’t think they’ll retire until they’re over 70.

In a separate study, CareerBuilder reports that 20% of Americans don’t think that they’ll ever be able to retire.

Making plans now, even if you are only a few years away from when you’d hoped to retire, can still make a difference. And you’re not left out in the cold if your employer doesn’t offer a 401(k). There are a number of savings vehicles available to help build your nest egg. You can even use your health savings account as a retirement savings account.

The key is to take that first step now.


Jocelynn Smith
Sr. Managing Editor, Sovereign Investor Daily

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