Comments on: The Obama IRA http://financialducksinarow.com/1201/the-obama-ira/?utm_source=rss&utm_medium=rss&utm_campaign=the-obama-ira Advice on IRA, Social Security, income tax, and all things financial Fri, 11 May 2012 12:17:33 +0000 hourly 1 http://wordpress.org/?v=3.3.2 By: Helen http://financialducksinarow.com/1201/the-obama-ira/#comment-258 Helen Mon, 13 Jul 2009 00:29:40 +0000 http://financialducksinarow.com/?p=1201#comment-258 Personally, I think it may be too much to expect for the average person to manage their investments for a comfortable retirement. I think we might want to encourage saving for retirement -- not necessarily investing -- for those who find it too complicated. There is just too much potential for things to go wrong. The consequences may be disastrous for our nation, if we have a nation with a significant fraction of very poor seniors (more so than we have today). Yes, I know that savings accounts barely keep up with inflation, but almost everyone understands savings accounts and CD's. This is harsh, but remember that 100 is the average IQ -- not everyone will understand the difference between a mutual fund and an individual stock, and it only takes one fast-talking Bernie to steal a nestegg. I would like to see the government offer some simple-to-understand low-risk investment plans (maybe around TIPS -- or similar) with a government agency to help provide unbiased advice. Personally, I think it may be too much to expect for the average person to manage their investments for a comfortable retirement. I think we might want to encourage saving for retirement — not necessarily investing — for those who find it too complicated. There is just too much potential for things to go wrong. The consequences may be disastrous for our nation, if we have a nation with a significant fraction of very poor seniors (more so than we have today). Yes, I know that savings accounts barely keep up with inflation, but almost everyone understands savings accounts and CD’s. This is harsh, but remember that 100 is the average IQ — not everyone will understand the difference between a mutual fund and an individual stock, and it only takes one fast-talking Bernie to steal a nestegg. I would like to see the government offer some simple-to-understand low-risk investment plans (maybe around TIPS — or similar) with a government agency to help provide unbiased advice.

]]> By: jblankenship http://financialducksinarow.com/1201/the-obama-ira/#comment-254 jblankenship Thu, 09 Jul 2009 18:10:19 +0000 http://financialducksinarow.com/?p=1201#comment-254 Thanks for the comment and for reminding me, Kevin... I did intend to point out that advice for the employee is a critical factor as well, but at these small levels it is literally impossible to efficiently deliver appropriate advice that is tailored to the individual. Generic advice is already available, and so the question becomes one of how to deliver it in a palatable fashion? Thanks again for the comment. Thanks for the comment and for reminding me, Kevin… I did intend to point out that advice for the employee is a critical factor as well, but at these small levels it is literally impossible to efficiently deliver appropriate advice that is tailored to the individual. Generic advice is already available, and so the question becomes one of how to deliver it in a palatable fashion?

Thanks again for the comment.

]]> By: Kevin O'Reilly http://financialducksinarow.com/1201/the-obama-ira/#comment-253 Kevin O'Reilly Thu, 09 Jul 2009 17:59:53 +0000 http://financialducksinarow.com/?p=1201#comment-253 Jim - I was preparing to post on this very topic, and have arrived at some of the same conclusions. My instinct is to react negatively to most things that are forced by the government. The unintended consequences can be painful and significant. Nonetheless, the savings incentives that currently exist have not had the intended impact. In this case, the biggest concern I have is the "tax" on small employers. I'd be more comfortable with this if the minimum number of employees was increased to 50 or 100+. Of course, that would dilute the impact of the program. Furthermore, as you point out, the "safe" investments that are being tossed around will either not be as conservative as advertised (target-date funds), or will be exposed to inflation. Education will therefore will be critical, as will the role of a Fiduciary. Kevin Jim -

I was preparing to post on this very topic, and have arrived at some of the same conclusions. My instinct is to react negatively to most things that are forced by the government. The unintended consequences can be painful and significant. Nonetheless, the savings incentives that currently exist have not had the intended impact. In this case, the biggest concern I have is the “tax” on small employers. I’d be more comfortable with this if the minimum number of employees was increased to 50 or 100+. Of course, that would dilute the impact of the program.

Furthermore, as you point out, the “safe” investments that are being tossed around will either not be as conservative as advertised (target-date funds), or will be exposed to inflation. Education will therefore will be critical, as will the role of a Fiduciary.

Kevin

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