Sunday, March 2, 2014
Obama Announces New MyRA Retirement Plan for Low Income Workers -- Really, A Low Income Retirement Plan? Can This Work?
There is a crises in America that involves millions of Americans who have investments in place for their retirement. Addressing this concern, during his 2014 State of the Union address, President Obama announced his plan to launch a new program called MyRA (My Retirement Account).
Referred to as a "starter" retirement account, the program is designed to give more Americans an opportunity to invest in small amounts that will help provide more financial security for their future retirement.
What is MyRA?
It's a government savings account that will be offered by employers in the workplace but managed by the government.
The reason for introducing the program is to help the approximately one half of all Americans who do not currently have a 401K investment program through their employers.
How will MyRA work?
MyRA will offer an opportunity for Americans to invest small amounts such as $25, up to $5,500 a year, in a government MyRA account. The money will be invested in safe, low-interest securities through the Government Securities Investment Fund. The securities offer low interest rates but are safe and will be backed by the U.S. government. Once the employee's account reaches $15,000, they can move their money into a regular Roth IRA. There will be no matching of investments by employers.
When will MyRA be available?
The MyRA program is being tested in various markets right now. When it becomes available to everyone, it will be announced.
For more details about MyRA, here's the official White House link: