myRAs Are Now Available to More Savers

By Sarah Brenner, IRA Technical Expert
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If you are just starting to save for your retirement or have a family member who is wondering what steps to take for a secure retirement, the recent announcement from the Treasury Department expanding the myRA program is important news. MyRAs, which were first established in 2014, are designed for new and small savers. MyRAs have no fees, no risk of losing money and no minimum balance or contribution requirements. These accounts are “designed to remove common barriers to saving, and give people an easy way to get started,” said U.S. Treasury Secretary Jacob J. Lew.

More Options for Funding Expand MyRA Eligibility
The Treasury Department has now expanded the ways you can fund a myRA, making these accounts an option for millions more savers nationwide. Originally, you could only open a myRA if your employer offered direct deposit of your paycheck. You can now also fund your myRA from your checking or savings account or direct all or part of your federal tax refund to your myRA when you file your taxes.
 

How a MyRA Works
A myRA may be a good fit for you if you have access to a retirement savings plan at work and want to save but haven’t found an easy way to get started. Your annual income must be below $131,000 if single, or below $193,000, if married filing jointly. While many financial organizations require initial contributions of several hundred dollars to open an IRA, myRAs can be opened with an initial contribution as low as $25.

A myRA is similar to a Roth IRA, but with a few twists.

• You can withdraw contributions from your myRA at any time without a tax or penalty.
• You may withdraw interest earned without tax and penalty five years after your first contribution if you are over age 59 1/2 or meet certain other conditions, such as using the funds to purchase your first home.
• Your myRA account can have a maximum balance of $15,000 or a lower balance for up to 30 years. When either of these limits is reached, your money is transferred to a private sector Roth IRA allowing for other opportunities to invest and grow your savings. You can also can choose to transfer or roll over your myRA into a private-sector Roth IRA at any time.

Currently, there is only one investment option, a government bond portfolio that will earn interest at the same rate as the Government Securities Investment Fund found in the Federal Thrift Savings Plan. MyRA balances are backed by the full faith and credit of the United States and will never decline in value. To learn more or to establish a myRA visit the Treasury Department’s recently updated website, myRA – my Retirement Account | Home.