The new idea of the MyRA is similar to a Roth IRA, but with only one investment option, the US Government. There is obviously some diversification red flags that come up with these accounts as well as a few others. Here is more basic information on what a MyRA is from a article on Yahoo Finance.
“In his State of the Union address, President Obama announced plans to launch another retirement savings option. In addition to the 401(k), 403(b), 457, IRA, Roth IRA, Roth 401(k), SEP IRA and a host of other retirement accounts, we now have the myRA, short for “My Retirement Account.”
Bypassing Congress, a few days later Obama signed a presidential memo directing the Treasury Department to create these retirement accounts.
How myRA accounts will work. The myRA account is designed for those who do not have access to a workplace retirement account. Eventually, anybody who has direct deposit available to them will be able to sign up. As long as household income falls below $191,000 a year, even those with access to 401(k) accounts will be able to take advantage of a myRA.
The account will work like a Roth IRA. Contributions will be made on an after-tax basis, but the account will grow tax-free. The only investment option will be in government savings bonds.
The myRA adds another layer of complexity to a retirement savings machine few fully understand now. Between workplace retirement accounts, the Roth version of those accounts and about a dozen different types of IRA accounts, the retirement landscape is littered with confusing options.
A better long-term strategy would be to simplify and consolidate this landscape, not add to it. As it currently stands, how much an individual can set aside in a retirement account depends on a dizzying array of questions including how much you make, whether you or your spouse have a workplace plan, your tax filing status and whether you are self-employed, to name a few.
The myRA only invests in government savings bonds. While this simplifies the account, it does so at the expense of capturing market growth. Savers will be guaranteed not to lose any money, but savers will also probably not make as much money as they would if they choose typically more lucrative but also riskier investments.
The deductible and Roth IRA options are already in place to help those without a workplace retirement plan. These options allow retirement savers to invest in individual stocks and bonds, mutual funds and ETFs”
Berger, Robert. “MyRA: The Good, Bad and Ugly.” Yahoo Finance. US News, 10 Feb. 2014. Web. 25 Feb. 2014.