Tags: Retirement | obama myRA

Who is Obama's myRA Savings Plan Targeting?

By    |   Tuesday, 05 May 2015 12:47 PM

The Obama myRA plan targets people who have no retirement savings. It offers a simple plan that is guaranteed not to lose money, which is intended to make it easier for people to enter the investment game.

According to Bankrate, millions of Americans have no retirement savings. More than a third of all adults haven't even started saving. Even a large number of those getting close to retirement still don't have any kind of IRA.

Free Retirement Calculator: When Can You Retire? — Click Here to Find Out

The myRA plans were developed to make it easy for workers who are not eligible for an employer sponsored savings plan, like a 401 (k), to get started.

AARP's senior policy analyst, David John tells CNBC, "This is not a solution to the national savings problem, but it's a tool towards addressing it. It's a simple accumulator account for new savers, with no administrative costs and no risk of loss."

The plan is appealing to risk-adverse savers. All of the money in myRA accounts is invested in United States Treasury Securities, which are backed by the Federal Government.

Unlike most Roth IRA plans, there are no other investment options. Like other Roth IRA plans, the amount invested in the plan can be accessed at any time without penalty. The growth on that money is tax free, as long as it is not used until the owner is 59 and a half- years-old, or if it is used for certain purchases, like education or a first-time home.

How Soon Can You Retire? Free Test Shows You When — Click Here

There are upper income limits for people who want to open a myRA account. Owners cannot make more than $131,000 a year for singles and $193,000 for married couples.

While the plan seems target and encourage young savers who may work only part-time or have other reasons they are not offered an employer backed retirement plan, some investing experts say it misses the mark for the demographic, because it only has a low rate of return.

IRA Technical Consultant Jeffrey Levine tells CNBC, "The biggest criticism of the myRA accounts is that there is only one investment option ... Shouldn't young savers be invested in growth assets?"

An Extremely Simple Way To Determine If You're Ready To Retire — Find Out Now

© 2017 Newsmax. All rights reserved.

 
1Like our page
2Share
FastFeatures
The Obama myRA plan targets people who have no retirement savings. It offers a simple plan that is guaranteed not to lose money, which is intended to make it easier for people to enter the investment game.
obama myRA
387
2015-47-05
Tuesday, 05 May 2015 12:47 PM
Newsmax Inc.
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
America's News Page
© Newsmax Media, Inc.
All Rights Reserved