The New "myRA" Savings account

As America ages the concern for adequate retirement savings provided my taxpayers themselves is an important concept.In his State of the Union address, the president talked about creating a new retirement savings vehicle called a “myRA”. This new savings idea is designed to be a simple and affordable “starter” savings account to help low and moderate income taxpayers save for retirement. The president through executive action has directed the Treasury Department to create this retirement savings vehicle. Approximately half of all workers and 75% of part-time workers are not included in employer sponsored retirement plans. The myRA will be available to these employees and is intended to help taxpayers save for retirement. The principal protection of these plans is that the account balance will never go down as such accounts will be backed by the US government similar to savings bonds. There will be no fees associated with contributions and tax-free withdrawals will be permitted at any time. These accounts are to be portable and taxpayers will have the option of rolling them over into private sector retirement accounts. The account will earn interest at the same variable interest rate that federal employees receive through the Thrift Savings Plan(TSP) Government securities investment fund. Taxpayers can start such an account with an initial investment as low as $25 and contributions as low as five dollars can be made through automatic payroll deductions. Participants can save up to $15,000 in their myRA account before transferring the balance to a private sector IRA. These accounts will represent little or no cost to employers since employers do not administer nor contribute to the accounts. A my RA pilot program will begin later this year and will be available nationwide in 2015.