If you ask a lot of people whether they’re saving for retirement, the many who are are likely doing so through a program at work. But many employers, especially small employers, do not offer that. Now there’s something called myRA and even if you think you don’t have enough to save, you’re urged to check it out. “”It’s a simple, safe and affordable way for people who are starting out or who are on modest incomes to start saving for their retirement,” says U.S. Treasury Secretary Jack Lew.
The U.W. Treasury Department launched the myRA website this week, after spending a year conducting a pilot program. You can sign up for automatic withdrawals from your paycheck every month or if you want, put money into the account yourself. “There’s no minimum amounts, so people can start by putting away just a few dollars a week,” says Lew.
And he says that can add up, giving people a bit of confidence they’re building a nest egg. “We also know when people get into the habit of saving they tend to continue and as they can afford to they increase the amount they save,” said Lew.
It costs nothing to open an account and there are no fees to manage it. Interest is earned and if you have an emergency you can withdraw money without tax or penalty. “So we’ve taken all the obstacles away. It always takes a little bit of initiative to log on and take the first step but I think people who do it are building a secure future for their own retirement,” said Lew.
Other Points of the program:
* For all those who want to save but haven’t found an easy way to get started
* While designed for lower or moderate incomes, one can earn an annual income below $131,000 if single, or $193,000, if married and filing jointly
* No fees and no minimum contributions.
* myRA carries no risk of losing money and the investment is backed by the U.S. Treasury.
* Savers choose the amount to contribute to their myRA (up to $5,500 per year or $6,500 per year for individuals who will be 50 years of age or older at the end of the year).
* Savers can withdraw the money they put in without tax and penalty and can withdraw interest earned without tax and penalty under certain conditions.2
* Savers can choose to transfer or roll over their account balance into a private-sector Roth IRA at any time.
* myRA accounts can have a maximum balance of $15,000 or a lower balance for up to 30 years. When either of these limits is reached, the money is transferred to a private sector Roth IRA where savers have other opportunities to invest and grow their savings.