Tags: Retirement | obama myRA | facts | savings plan

10 Facts About Obama's myRA Savings Plan

By    |   Tuesday, 05 May 2015 01:01 PM

The Obama myRA initiative is set to begin helping earners save for retirement.

Here are 10 facts about the new savings plan:

1. Employer's part in the plan is limited: The employer does not provide matching funds or have any ownership in a myRA savings plan. Contributions, however, must be managed by employers who will facilitate direct deposit from worker's paychecks.

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2. The plan is a form of Roth IRA: Like regular Roth IRAs the contributions in a myRA are made after taxes. The money taken out of the account at retirement is tax-free.

3. There is no investment choice: The plans put all of myRA investor money into United States Treasury Securities. Unlike other IRAs, workers do not have a choice about where the money is invested.

4. The plans are risk-free:
Because the money in a myRA is invested in a United States Treasury Security, it is able to grow risk-free. The value of the plan will never go down.

5. There are no fees: The myRA is free to open. There are no investment costs or fees to maintain.

6. The account has a cap: The myRA account allows people to save up to $15,000, at which point it will have to be converted to a regular Roth IRA. There will be no tax penalties for this kind of conversion.

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7. There are income limits: The only people who can start a myRA account are people who have an income "less than $131,000 for individuals, and $193,000 for married couples filing jointly," according to myRA regulations.

8. The money you put in can be taken out: Investors in myRA accounts can take out the money they invested at any time without penalty. It is the growth that risks a potential tax penalty if it is taken before the owners is 59 and a half-years-old.

9. The myRA is intended to help
people not eligible for an employee sponsored plan – like a 401 (k)

10. The plan is intended to be a retirement starter fund: The plans have low maximums ($15,000) and are intended to be a stepping stone to larger savings amounts.

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The Obama myRA initiative is set to begin helping earners save for retirement.
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2015-01-05
Tuesday, 05 May 2015 01:01 PM
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