myRA Retirement Savings Plan Offers Same Rate as Federal Employee Retirement Plans
Following the conclusion of a pilot project, the U.S. Department of the Treasury has announced the nationwide launch of myRA, a new savings option for those who don’t have access to a retirement savings plan at work.
U.S. Treasury Secretary Jacob J. Lew noted that “myRA has no fees, no risk of losing money and no minimum balance or contribution requirements.”
myRA accounts will earn interest at the same variable rate available to federal employee retirement accounts, and will follow the same rules as a Roth IRA.
Funding and Withdrawal Flexible in myRA Retirement Savings Plan
You can set it up to be funded through automatic direct deposit contributions through an employer. Note that employers do not have to manage employee myRA accounts, contribute to them, or match employee contributions. They simply facilitate an ongoing payroll deduction from the employee’s paycheck to the designated myRA account as long as the employee is working for them.
If myRA account owners change jobs, the account stays with them and they can simply switch the deductions to their new employer. You may also fund the account from a checking or savings account, or by directing all or part of your federal tax refund to the myRA account.
Account owners choose how much to save, subject to the maximum annual Roth IRA contribution limits. Unlike federal employee retirement systems, account owners can withdraw the money they put in at any time without tax and penalty. Roth IRA requirements do still apply to the tax free withdrawal of any earnings.
As myRA account holders grow their savings, they have the option to transfer to a private-sector Roth IRA with diverse investment options at any time, or transfer to a private-sector Roth IRA once they reach the maximum myRA balance of $15,000.