Obama Creates myRA Accounts

As announced in the recent State of the Union address, Obama has taken executive action and instructed the Treasury Department to create a new form of retirement account:  the “myRA.”  Not a whole lot to get excited about here, but an overview is of some interest:

  • Savers will benefit from “principal protection,” such that the account balance will never go down in value.
  • Contributions can be withdrawn tax free at any time.
  • Savers can keep the account balance when they change jobs (“portability”).
  • Workers can start an account with as little as $25.
  • The account will earn interest at the same variable interest rate that federal employees receive through the Thrift Savings Plan (TSP) Government Securities Investment Fund.
  • Taxpayers in low and middle income households earning up to $191,000 per year will be able to create a myRA account.
  • Participants can save up to $15,000, or for a maximum of 30 years, in their myRA account before transferring the balance to a private sector Roth IRA.