Your Take: Is the myRA Worth Getting Excited About?

by Michael on Jan 31, 2014 · 3 comments

Photo of an Overly Excited Guy

The big news this week was President Obama’s announcement of the forthcoming availability of so-called myRA retirement accounts.

As we’ve discussed, the myRA is essentially a Roth IRA wrapped around a savings bond that will pay out at the same rate as the federal Thrift Savings Plan (TSP) G Fund.

These accounts, which will be managed by the Treasury and funded via payroll deduction, will be available to those who don’t have access to a workplace retirement plan and who fall below certain income requirements.

You will, of course, be able to roll your account over to a private sector custodian at any time. But once your account reaches a $15k balance (or you’ve been contributing for 30 years) you’ll be required to roll it over.

On the one hand, these accounts could serve as a gateway to more serious saving/investing for those who might otherwise not plan for the future. That’s a good thing. Then again, everyone who qualifies is already eligible for a Roth IRA.

So what do you think? Is the myRA worth getting excited about? Do you think it will have the desired effect of getting more people to save for the future? Or do you think it’s much ado about nothing?

P.S. This post is part of a new, semi-regular feature that’s intended to let you guys have your say on timely topics. Note that RSS and e-mail subscribers will have to click through to the site to read or leave comments.

1 Money Beagle January 31, 2014 at 12:11 pm

It isn’t really anything new, it’s just making it easier to access something that’s already out there. The way I feel about it is that it’s a nice PR move, but it’s probably not going to make a huge impact for those who take advantage of it. With the low payout rate, anybody who can afford to save a good chunk is probably not going to use this, meaning that those who do use it will probably be those who might not save otherwise. Unfortunately, I don’t see it as a tool that’s going to make anybody say “I was able to retire comfortably because of MyRA”

2 Aaron B January 31, 2014 at 12:55 pm

It’s better than nothing, but not by much. I really wish “they” (whoever is in charge for this) would open up the whole Thrift Savings Plan to small businesses that don’t/can’t offer a retirement plan. How small-business-friendly would that be?!

3 Tie the Money Knot February 4, 2014 at 4:40 pm

Better than nothing, but the reality is that there are already options out there for people anyway. I’d prefer to see more financial education incorporated into the curriculum of public schools, and other efforts to educate people about finances – because frankly, many people have zero clue. The don’t know what they don’t know 🙂 But, if this new vehicle at least gets some people to invest a little bit who otherwise might not, that’s a good thing in its own right.

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