A Retirement Savings Plan for the Rest of Us

President Barack Obama in his State of the Union Address on Tuesday, January 28, 2014, made a revolutionary proposal concerning your potential retirement. In case you missed it, here is a brief discussion of that proposal.

All of us are familiar with the so-called 401(k) plans that enable employees of usually larger companies and businesses a to put aside some of their compensation in certain investments which are not taxable as income when received and which are permitted to grow tax-deferred until withdrawn in retirement. The idea is that those investments will be taxed at  presumably a lower rate at retirement than  at the current rate.

Until now, if your employer did not offer such a plan, you were out of luck. President Obama's proposal would permit those employees to fund  a so-called MyRA account by having a part of each paycheck deducted and deposited in US Government Bonds, where they would be given the same treatment as traditional 401(k) plans.

According to administration officials, millions of Americans who do not have access to the automatic deposit feature of a 401(k) plan are likely to take advantage of the MyRA proposal.

Let me know what you think and whether, if you qualify, you would take advantage of such a plan.