MyRA Account Starting Point For Retirement Savings

    The United States government is opening the door to retirement savings for the millions of Americans who have nothing invested there, but a word of caution if you go inside: There’s not much to see.

    The federal government is offering a retirement account – called myRA – that has no fees, no minimum balance, no risk of losing your money and you can open it at any age. That’s the upside.

    The downside is there is only one place to invest your money, the return is negligible and there is a $15,000 max limit on your account and that little bit of savings won’t do a lot to ease all the financial obligations you have during retirement.

    Still, it’s a starting point for the nearly one out of three American workers who don’t have one when it comes to retirement.

    “We know that once people start saving, they’re very likely to continue saving,” Treasury Secretary Jacob Lew said. “The challenge is to get started.”

    MyRA Similar To Roth IRA

    That hasn’t happened yet for 31 percent of the workforce that, according to the Federal Reserve, has no retirement savings and no pension. They are the primary target of the program, along with part-time workers and those working in companies that don’t offer 401(k) accounts.

    If they decide to start saving with a myRA account, they will be signing up for a modified version of the Roth IRA program, which allows workers to save after-tax dollars for retirement. Some of the other provisions to the program include:

    • To qualify for an account, individuals must earn less than $131,000. Married couples who file joint returns must make less than $193,000.
    • People who enroll in myRA can contribute up to $5,500 a year (for those under 50) and $6,500 a year for those over 50 at the end of the year.
    • Money invested and interest earned on myRA accounts can be withdrawn with no penalty by people 59 and a half years or older. Those under 59 and a half must pay taxes on the interest earned.
    • Money can be deposited into account from your paycheck or from a savings or checking account. You also can designate all, or a portion, of your tax refund to go into a myRA account. There is no minimum amount that can be deposited and no minimum balance.

    Only One Investment Choice

    There is, however, a maximum account balance of $15,000. When your account reaches that level, you must move it to a private-sector retirement account like a regular Roth IRA.

    The real problem with a myRA account is the lack of choices and slim return on investment.

    Every dollar invested in myRA accounts goes into government bonds, called Government Securities Fund. There are no other choices. You’re guaranteed to make some money, but nothing like you would in a typical retirement investment account.

    The return on Government Securities Fund for 2014 was 2.3 percent. The average annual yield for the last 10 years has been 3.2 percent, which barely keeps ahead of inflation. Most investments are expected to return eight percent or more over that length of time and there are thousands of choices of where to put your money.

    Still, if you’re a low-income wage earner or someone who stayed away from the market because investing overwhelms you, this is a suitable starting point and that is all Lew expects it to be.

    “MyRA is a simple, safe and affordable way to get started,” Low said. “It’s a bridge to other retirement savings products where you can continue to invest and grow your savings.”


    Bill Fay
    Staff Writer

    Bill “No Pay” Fay has lived a meager financial existence his entire life. He started writing/bragging about it seven years ago, helping birth into existence as the site’s original “Frugal Man.” Prior to that, he spent more than 30 years covering college and professional sports, which are the fantasy worlds of finance. His work has been published by the Associated Press, New York Times, Washington Post, Chicago Tribune, Sports Illustrated and Sporting News, among others. His interest in sports has waned some, but his interest in never reaching for his wallet is as passionate as ever. Bill can be reached at

    In debt? We can help!

    • Amount
    • Type
    • Contact

    How much do you owe?

    What can we help you with today?

    Related Articles

    Older couple sitting with papers and considering bankruptcy

    Retirees and Bankruptcy

    People are supposed to relax when they retire, not worry about financial problems. Studies show that a lot of retirees turn to alcohol for debt relief, but there is a better way than booze:  Bankruptcy.The mere word makes a lot of people cringe, ...

    Continue Reading
    Jar full of coins intended for a 401K savings plan

    Employers Up The Ante On 401k Plans

    There is a new twist on the ages old discussion about how much is needed for retirement savings: Employers – not employees! – are taking the initiative.The Vanguard Group, an investment management company, said that 36 percent of the companies it ...

    Continue Reading
    Large cost for education

    Workers Put Paying For Child’s College Ahead Of Retirement Savings

    American workers have found another escape hatch to avoid contributing to their retirement savings and at least 33 percent of them say they would voluntarily take it.The LIMRA Secure Retirement Institute released a study that said one-third of U.S. ...

    Continue Reading
    Rent Or Own Your Home In Retirement

    Key Retirement Question: Rent Or Own?

    There are 10,000 Baby Boomers retiring every day for another 14 years, which means a lot of people have a choice that will have a monumental impact on their retirement: Rent or own?Wait a minute. Didn’t they settle that question 20 or 30 years ...

    Continue Reading
    Senior Student Debt

    Social Security Checks At Risk As Seniors Take On Student Loans

    Wanda Russell had just turned 50 when her bosses told her she would have to go back to college and get a bachelor of nursing degree to keep her job.Russell gulped. Back to college? At this stage of my career?Russell was an assistant nurse manager for ...

    Continue Reading
    Baby boomers have enough to retire

    Baby Boomers Better Prepared for Retirement than Previous Generations

    A new report says that most baby boomers have successfully stuffed enough pennies into the piggy banks – and dollars into the 401(k) plans – to retain their status as the most pampered generation in America, even in retirement.Americans have put away ...

    Continue Reading
    Signing Will

    No Cash for a Will? Leave a Fond Memory Instead

     As a growing number of retirees come to grips with their dwindling cash flows to leave as inheritance, many are turning to other ways to preserve their memory for future generations. Gone are the days that an inheritance means a big ...

    Continue Reading
    teen taking money

    Teens Are Counting on Parents to Finance Retirements, Study Shows

    Attention moms and dads: your teens are counting on you for more than a few bucks for a movie or some new clothes. They’re depending on you to pay for their retirements too. About 40 percent of young Americans aged 13 to 22 are expecting an ...

    Continue Reading
    Get Help Now

    Overwhelmed with debt? You have options for lower monthly payments!