What’s with myRA?

myRAIn his State of the Union message, President Obama announced a new retirement savings program for those people who don’t currently enjoy an employer-sponsored plan.

This new product, called myRA, is similar to a Roth IRA.  It is mainly geared toward low- and middle-income workers (married couples with modified adjustable gross incomes of up to $191,000 and individuals of up to $129,000).  Eligible workers may open a myRA with as little as a $25 initial investment and additional contributions as low as $5 at a time.

Post-tax contributions may be withdrawn at any time, though there will be a penalty for withdrawing earnings before age 59 ½.  Additionally, if a myRA grows to $15,000, then it must be rolled into a Roth IRA moving forward.  In fact, even if the maximum investment is never reached, the account will automatically be rolled into a Roth IRA after 30 years (which is how long the accounts may remain open).  With all these similarities, the question that begs a response is how does a myRA differ from a Roth IRA.  The main difference is that a myRA is backed by U.S. Treasury bonds, so investors will never lose their principal investments.

Click here to learn more about myRA.


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