Obama's myRA Retirement Account Details

by Michael on Jan 29, 2014 · 2 comments

Details regarding President Obama’s proposed myRA retirement accounts have begun to dribble out. Here’s what we know about the program so far…

About the myRA

  • It will be targeted at those without access to a workplace retirement plan
  • It will be offered via a “familiar” Roth IRA account
  • Since it’s a Roth, contributions can be withdrawn at any time
  • Initial investments as low as $25 with ongoing contributions of as little as $5
  • Contributions will be made via payroll deduction
  • Ability to keep same account when changing jobs — yeah, because it’s a Roth
  • Interest will be paid at the same rate as the Thrift Savings Plan (TSP) G Fund
  • Savers will enjoy “principal protection” so account values can’t decrease
  • It will be available to households earning up to the Roth income limit of $191k/year, and presumably subject to the same phaseouts
  • The accounts will have “little to no cost” — this isn’t really possible, but presumably there will be no visible fees
  • Participants will be able to accrue up to $15k, or participate for 30 years before switching to a private sector Roth IRA
  • Accounts will initially be offered via a pilot program to employees whose employers opt-in during 2014

Related: Weigh in. Is the myRA worth getting excited about?

According to the President’s remarks at a stop in Pittsburgh today, the actual investment vehicle within the account will be a savings bond but, as noted above, it will be behave like the TSP Government Securities Index Fund.

So the myRA is just a Roth IRA with low minimums, payroll deduction, and access to a clone of the TSP G Fund. Not exactly revolutionary, and probably not necessary, but it will hopefully make savings opportunities more visible to non-savers.

Source: WhiteHouse.gov

1 KBL January 31, 2014 at 5:02 pm

I couldn’t tell if contributions to the myRA counted against the $5500 annual Roth limit, or if it is separate. If separate, that’s somewhat more significant.

2 Michael February 1, 2014 at 10:35 am

The wording from the Treasury indicates that they “will be Roth IRA accounts…” So contributions to the myRA should count against the $5,500 annual Roth limit (which is shared with traditional IRAs).

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