myRA accounts will allow people to invest in government savings bonds that guarantee - according to the president - " a decent return with no risk of losing what you put in."
Don't believe it.
Here are four reasons why investing your retirement savings into President Obama's myRA is a terrible move.
Reason No. 1 to Avoid Obama's myRA: You'll lose spending power.
myRA investors will be buying government vehicles that due to inflation will actually lose money each year.
"These things are going to pay out at 1% to 1.5% at a time when real inflation is running at 2.5% - and that's only according to 'official' government figures," Money Morning Chief Financial Strategist Keith Fitz-Gerald said.
According to the Obama administration, the myRA accounts would have the same variable interest rate return as the Thrift Savings Plan Government Securities Investment Fund accounts that federal employees enroll in. That fund had low annual return of 1.47% in 2012.
"This is not a good deal for investors, no matter how the government spins it," Fitz-Gerald said. "And that's not even taking into consideration the interest rate risk when rates start to rise a year or two from now."
Reason No. 2 to Avoid Obama's myRA: Government ventures mostly bomb.
No one wants a money manager with a bad track record. And a bad track record is precisely what the government has.
"The government thinks Amtrak and the United States Postal Service are viable businesses," Fitz-Gerald said. "Do you really want it handling your investments?"
Since 1971, the federal government has been subsidizing the for-profit Amtrak. In fiscal 2012, Amtrak earned approximately $2.877 billion in revenue but incurred approximately $4.036 billion in expense. Over the past decade, Amtrak lost $833.8 million on food sales alone, leaving taxpayers to make up the difference. The federal government provided Amtrak with $1.8 billion in fiscal 2013.
Meanwhile, on Nov. 15, the U.S. Postal Service announced it lost $5 billion across fiscal 2013 - its seventh consecutive year posting a net loss.