myRA Retirement Accounts Are Now Available Nationwide

This is a U.S. Treasury Department program aimed at low to middle income individuals as a starter account to encourage those that do not have access to employer-sponsored plans to become savers. Account funds are invested in a US Treasury bond (only this one investment option) and are backed by the US Treasury.

The myRA is a Roth IRA retirement savings account and has the same income limitations and tax treatment as typical Roth IRAs. For 2015, individuals can contribute up to $5,500 to their myRA account with an additional catch-up contribution up to $1,000 available for individuals over age 50. For 2015, the eligibility to make contributions phases out when AGI (adjusted gross income) is between:

$116,000 and $131,000 for single filers, and

$183,000 to $193,000 for those who are married filing jointly.

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These accounts have no fees and there are no start-up costs, either. Individuals wishing to open an account can go online to https://myRA.gov where they are walked through the setup process. People may enroll with a minimum contribution of $25 that is required at the time of setup. There is no per deposit minimum contribution amount and there is no minimum balance requirement. The account can be funded via direct deposit from a paycheck or transfers from a personal account. myRAs are portable so those with multiple jobs can use direct deposit from each employer to fund one account. When the account reaches $15,000 it must be transferred to a Roth IRA at a financial institution.

Since these are not employer-sponsored retirement accounts there is no employer responsibility or fiduciary duty. Employers do not administer the accounts, contribute to them or make matching contributions. Employees simply provide employers with a direct deposit authorization to have a portion of their paychecks automatically deposited into their myRA. If an employer does not offer direct deposit, the employee then funds the account from their personal account. The Treasury Department offers free resources for employers to provide to their employees at https://myra.gov/employers/#resources.

 “myRA was developed for individuals looking for a simple, safe and affordable way to start saving and investing. It’s a starter account that serves as a bridge to other retirement savings and investment products. At any time, savers can transfer their funds to a private sector Roth IRA where they can continue to watch their savings grow,”

Dan Watson, Treasury spokesman.

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