Important update: The U.S. Department of the Treasury decided in July 2017 to phase out the myRA program, and the program is no longer accepting new enrollments. Savings in existing accounts remain safely invested.
Many people know it's important to save for retirement, but haven’t found an easy way to get started.
In fact, more than 30 million full-time employees in the United States lack access to workplace retirement savings plans, according to a new report from the Pew Charitable Trusts. Minorities are hit the hardest: 62 percent of Hispanic and 44 percent of African-American workers don’t have access to retirement savings plans through their jobs, compared to 37 percent of white non-Hispanic workers.
Ready to start building a more secure financial future? Here are five things you should know about myRA:
1. It costs nothing to open a myRA account.
One common barrier to saving is the cost of opening and maintaining a retirement savings account. With myRA, it costs nothing to open an account, and there are no fees and no minimum contribution requirements.
2. Contributions can be made automatically.Savers open their myRA accounts online at myRA.gov and can fund their accounts by setting up automatic direct-deposit contributions through their employers. Automatic contributions are a great way to get in the habit of saving; over time, individuals can build their savings without even thinking about it. In addition, savers can contribute to their myRA accounts from their checking or savings accounts.
3. Savers can contribute as little or as much as they choose.
Savers can start funding their myRA accounts by contributing as little as a few dollars a month up to $5,500 per year (or $6,500 per year if you’re 50 years of age or older).
4. It’s easy to turn tax refunds into savings.
Tax season is a great time for people to boost their retirement savings. For many people, tax refunds are the single largest sums of money they get all year. In 2016, tax filers can direct some or all of their federal tax refunds to their myRA accounts.
5. Savers can continue growing their savings.
myRA is intended to be a starter retirement savings account, and savers can transfer or roll over their account balances to private-sector Roth IRAs of their choosing at any time. Money in a myRA continues to earn interest until the account reaches $15,000, or 30 years from the day the account is first funded (whichever comes first). At that time, the balance will be transferred to a private-sector Roth IRA, where the saver can continue to invest the savings and make additional contributions.
Interested in learning more? Visit myRA.gov.
