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Make Saving for Retirement Your New Year’s Resolution with myRA
WASHINGTON– This holiday season, the U.S. Department of the Treasury encourages Americans to give themselves the gift of saving for the future with myRA (my Retirement Account) and to resolve to regularly save for retirement in 2016. Launched nationally in November, myRA is a new simple, safe and affordable savings option designed for Americans without access to a retirement savings plan at work. People can get information about myRA and sign up for an account at myRA.gov.
“As you gather with loved ones over the holidays, it’s a reminder of the need to plan a secure retirement for you and your family,” said U.S. Treasury Secretary Jacob J. Lew. “myRA removes many of the common barriers to saving, like fees or minimum requirements, and gives people an easy way to get started.”
myRA is designed as a starter retirement account to help bridge the savings gap for many workers. It is free, has no risk of losing money and no minimum balance or contribution requirements. 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.
“Saving for retirement is a New Year’s Resolution that myRA can help you keep,” added Secretary Lew. “With myRA’s automatic contributions, you can achieve your resolution on January 1st and watch your savings grow throughout the year.”
With myRA there are three easy ways to start saving:
·Paycheck. Set up automatic direct deposit contributions to myRA through an employer.
·Checking or savings account. Fund your myRA account directly by setting up recurring or one-time contributions from a checking or savings account.
·Federal tax refund. At tax time, direct all or a portion of a federal tax refund to myRA.
According to a 2015 Federal Reserve Report, 31 percent of non-retired people said they have no retirement savings or pension whatsoever. Additionally, a 2013 report by the National Institute on Retirement Savings found that the average near-retirement household had only $12,000 in retirement savings. Among workers who do not participate in a 401(k) or other defined contribution plan, 42 percent say it’s because their employer does not offer one. Furthermore, among part-time workers, a 2015 BLS Economic Release found that 62 percent don’t have access to a retirement plan at work.
myRA is a Roth IRA and follows the same eligibility requirements. To participate in myRA, savers (or their spouses, if married filing jointly) must have taxable compensation to be eligible to contribute to a myRA account and be within the Roth IRA income guidelines. Savers can contribute to their myRA accounts as little as a few dollars 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 also withdraw money they put into their myRA accounts tax-free and without penalty at any time. Roth IRA requirements apply to the tax free withdrawal of any earnings.
For more information about myRA or to sign up for an account, visit myRA.gov.
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