Low-Minimum Funds Well-Suited as myRA Alternatives
With equity exposure and low initial-contribution limits, these analyst-vetted names could be a better choice.
President Obama's plan to create a new retirement-savings vehicle called the myRA, introduced during last week's State of the Union address, was met with a mixed reaction among financial experts.
Some say the concept is a step in the right direction in that it provides a way for those who lack access to an employer-sponsored retirement plan to get started on the important goal of saving for their golden years. Others, however, said the myRA, which would be invested solely in government bonds, will provide too low a return--in the range of 2%-3% at today's rates--to provide the level of growth required of such a savings vehicle. The accounts will be similar to a Roth IRA in that growth and distributions will be tax-free, and once the account balance reaches $15,000 it can simply be rolled into a Roth IRA.
Adam Zoll does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.