myRA

myRA

President Barack Obama signed a presidential memorandum in January 2014 directing US Dept of Treasury to create "myRA".  myRA is to be a "a new simple, safe and affordable “starter” retirement savings account that will be initially offered through employers and will ultimately help low and moderate income Americans save for retirement".

• Beginning in late 2014, with this retirement savings account  individuals will be able to open accounts and begin contributing to them every payday. 
• myRAs will be initially offered through employers, balances will never go down, and there will be no fees. 
• myRAs will hold a new retirement savings bond that will be backed by the US Treasury.

The key features of myRA include:

• No cost to open an account.
• Contribute to savings through regular payroll direct deposit.
• Individual decides how much to contribute every payday ($50, $25, $5 – any amount!)
• No fees.
• myRAs will earn interest at the same variable rate as the Government Securities Investment Fund in the Thrift Savings Plan for federal employees.
• myRAs will not be limited to one employer  – the account will be portable.
• myRA contributions can be withdrawn tax free.
• Earnings can be withdrawn tax free after five years and the saver is 59½.
• Account holders can build savings for 30 years or until their myRA reaches $15,000 – whichever comes first. 
• After that, myRA balances will transfer to private-sector Roth IRAs.

References:

myra.treasury.gov/