MyRAs now available nationwide
MyRA, the new retirement savings account intended for people with taxable compensation income but who lack access to an employer-sponsored retirement plan, was launched nationwide Wednesday with an announcement by Treasury Secretary Jack Lew.
The accounts are “designed to remove common barriers to saving, and give people an easy way to get started,” Lew said in a release.
The program, which has completed an initial pilot phase, was first announced last year by President Barack Obama in his State of the Union speech. Eligible individuals may learn more and apply online at myra.gov.
A myRA (my Retirement Account) is a government-sponsored Roth IRA. Accounts hold only one type of investment, a new Treasury security earning the same variable interest rate paid by the Government Securities Investment Fund in the Thrift Savings Plan for federal employees. As of the 10-year period ending December 2014, that rate was 3.19%. No fees apply.
The accounts have the same contribution limits and withdrawal rules as private-sector Roth IRAs. Thus, for example, single individuals must have an adjusted gross income below $131,000, or married couples filing jointly no more than $193,000 (the top of the phaseout range under Sec. 408A(c)(3), as adjusted for inflation for 2015). Contributions for 2015 may not exceed the lesser of $5,500 (plus a $1,000 catch-up contribution for individuals 50 years of age or older) or 100% of compensation. Read more on the Journal of Accountancy.