Dear Mr. Berko: 

I have a bachelor’s degree in history and a master’s in sociology. I teach at a public school and made $39,000 last year. My wife also has a college degree. She is a waitress at a nice restaurant and makes about $25,000 a year. My pension plan is lousy. We don’t have individual retirement accounts, because making the investment choices is so complicated and the brokers we talked to were pushy and short with us. We can save a few thousand dollars a year and need honest help with how to invest in an IRA. Could you recommend someone to us? And what do you think about the new myRA plan, which is being offered by the Obama administration? 

D.R., Waterloo, Iowa



Dear D.R.: 

MyRA may soon be recognized as one of the biggest jokes and public flops ever to come out of Washington.

The designers of this farce were tasked by the Obama administration to bring an affordable retirement plan to the public in order to expand participation and eventually to provide workers with modest and meaningful assets to augment their retirement. The administration figures the average participant will contribute $50 every two weeks in the government’s bond fund. If so, in a dozen years, a myRA will be worth slightly over $15,000 and must be rolled into a Roth IRA with a brokerage firm.

Now, do you really think most people earning $9 to $16 an hour give a fig or ficus about myRA? Everyone knows that when push comes to shove, the government will be there at retirement time, passing out checks for food, housing, cellphones, health care, utilities, etc., every month like clockwork. MyRA won’t fly because most Americans live paycheck to paycheck and don’t have $50 or the discipline to invest every two weeks. Also, that money will be taxed when it must be moved into a Roth IRA, and that poor schnook won’t have $15,000 to roll over. Furthermore, a dozen years hence, that $15,000 will be a meaningless amount, one that will barely buy bupkis or bananas. Today, the federal myRA department has 33 employees, and as certain as summer follows spring, within a few years, the myRA bureaucracy will expand to thousands of employees, having a budget in the billions and a data center generating enough paperwork to sink an aircraft carrier. Mark my word.

Sadly, Merrill Lynch, UBS, A.G. Edwards, Morgan Stanley, Wells Fargo, J.P. Morgan and Bank of America don’t want anything to do with folks like you. You’re the green-behind-the-ears bumpkin. You’re the great unwashed, and those imperial brokerages feel they may get their hands dirty. These brokerages don’t look down their noses at you; rather, they look down their chins at you. And they’ve conveniently forgot that it was only a few years ago when they were down on their knees in the dirt, begging Washington for help.

But don’t fret, because you’ve still got access to all the goodies Wall Street has to offer at a much lower cost – and sometimes at zero cost. There’s a TD Ameritrade within easy driving time of your home. That brokerage has no maintenance costs and no minimum IRA investment. ShareBuilder doesn’t have any maintenance costs or minimum investment, either. Scottrade, also close by, has no maintenance fees but a $500 minimum. And Vanguard, which employs good folks, has no maintenance fees but a $1,000 minimum. Those brokers will help you with those confusing investment choices, and I’m certain each will recommend several mutual funds, preferably no-load funds. Because there are so many more bad mutual funds out there than there are good funds, you might still be behind the metaphorical eight ball. So I’ll make your investment decisions a bit easier. Call for appointments and visit a couple of those brokerages. I doubt they will subject you to any selling pressure as would a salesman from Wells Fargo or Bank of America. Ask both of the brokers you interview to give you prospectuses on the funds they recommend. Then send me an email with the fund names, and I will get back to you as pronto as possible with the best choices for you.