Most Americans have scant hope of saving enough money to support themselves in retirement. In his State of the Union speech last night, president Obama proposed a new retirement plan for workers called "myRA." It's not an IRA. It's not a pension. What the fuck is it?

Wouldn't you like to know! In his speech, Obama said, myRA would be designed as something distinct from pensions (which are a pipe dream for most people), 401(k)s (which are only for the relatively well-off), and Social Security. He called it a "new savings bond that encourages folks to build a nest egg [and] guarantees a decent return with no risk of losing what you put in." Sounds great! But how? The White House said this in a fact sheet:

Creating "myRA" – A New Starter Savings Account to Help Millions Save for Retirement. The President will take executive action to create a simple, safe and affordable "starter" retirement savings account available through employers to help millions of Americans save for retirement. This savings account would be offered through a familiar Roth IRA account and, like savings bonds, would be backed by the U.S. government.

Further reporting from the Wall Street Journaland Bloomberg makes clear a few more details of the plan: it will be voluntary for workers; it will be a payroll deduction; it will funnel money into an account invested in government bonds, which will get favorable tax treatment; and it will be rolled over into an IRA once it reaches a certain size. So it is a starter IRA, more or less. It is a way to get people to start saving, even if they can only save a little.

That's nice. But it doesn't answer a few other questions: How are people supposed to save when they don't make enough to live? How much of a return will this program offer on worker investments? How much will that cost the government?

And how is this better than just automatically increasing government payments to low income retirees who need the money the most?

Incentives to save are good. Expanding the pool of IRAs is nice. But the overwhelming problem is that many people are too poor to provide for themselves in retirement. Direct payments just make the most sense.

[Photo: Getty]