Posted at 11:16 AM
Created on July 24, 2014
The U.S. Department of the Treasury will develop the myRASM (“My Retirement Account”) program, offering a new retirement savings account for individuals looking for a simple, safe, and affordable way to start saving. Savers will be able to open an account with as little as $25 and contribute $5 or more every payday. myRA balances will never go down, and there will be no fees. Initially, myRA will be made available through employers and the investment held in the account will be backed by the U.S. Treasury.
WHO WILL myRA BE FOR?
myRA will be Roth IRA accounts available to anyone who has an annual income of less than $129,000 a year for individuals and $191,000 for couples. myRA will be for savers who do not have access to an employer-sponsored retirement savings plan. myRA is designed for savers who want an investment with a low opening amount.
HOW WILL myRA WORK?
The myRA investment will earn interest at the same variable rate as the Government Securities Investment Fund in the Thrift Savings Plan for federal employees. Savers may voluntarily roll over myRA to private-sector retirement accounts at any time. Once a saver’s myRA reaches $15,000, or after 30 years, the balance will be transferred to a private-sector retirement account. Treasury will finalize transfer procedures when it launches the myRA program later this year.
HOW WILL I SIGN UP FOR A myRA?
Once the accounts are available, employees of participating employers will start by signing up for a myRA account online. They will set up an initial automatic payroll direct deposit with their employers for a minimum contribution of $25. Employees will then elect to have a portion of their paychecks—$5 or more
—directly deposited into their myRA automatically every payday.
• Deposits are automatic every payday
• Portable – not tied to a single employer
• Contributions can be withdrawn tax free
• Earnings can be withdrawn tax free after five years and the saver is 59½
• Will never go down in value
• Information will be private and secure
• Backed by the U.S. Treasury
• As little as $25 to open an account
• Contribute $5 or more every payday
• No fees
• Roth IRA tax advantages
WHEN WILL myRA BE AVAILABLE?
Treasury will begin rolling out myRA in late 2014.
HOW WILL EMPLOYERS PARTICIPATE?
myRA will be free and easy for employers to make available to employees. Employers may distribute myRA information but will not administer employee accounts, contribute to them, or match employee contributions. On payday, employers will send a direct deposit to participating employees’ myRAs.
For additional information, visit TreasuryDirect website or call (800) 553-2663.