myRA simply stands for my Retirement Account. It is a type of Individual Retirement Arrangement account that is administered by Comerica and the United States Treasury. The program aims to help more Americans save for retirement as a social security check may often not be sufficient to stand on its own. You can think of this account as a savings bond that will help you build a nest egg to financially secure yourselves during the years of retirement. This special account is also designed to provide you a decent return with little risk of losing what you put in.
How does it benefit me as an employee?
First and foremost, this retirement account can work as a supplement to your 401(k) plan which is offered by your employer. Additionally, this new retirement savings option has been designed to make it extremely easy for you to participate. You do not have to worry about hidden fees, minimums or risky investments.
How does it work?
myRA is designed with simplicity in mind. You can make automatic deposits from your own paycheck into myRA during each pay period. As there are no risks of losing your hard-earned money, your funds will be able to earn interest along the way. You can save up to $15,000 through this practice.
Signing up for myRA is an easy 3-step process. First, you can open a new account either by phone or an online application. Next, you will need to give a direct deposit authorization form to your employer. This is to ensure that each deposit is deducted from your paycheck. Lastly, you do not need to do anything else but just watch as your money grows! You can opt to save money in your myRA account for up to 30 years. After that, the funds you have accumulated will be transferred to a Roth IRA.
What are the benefits of signing up for this option?
myRA is extremely affordable as there are no maintenance fees, you have the flexibility to contribute an amount you are comfortable with and still enjoy tax advantages. Furthermore, myRA never decreases in value and your information will always remain private and secure. One of the best things about myRA is that you can withdraw money at any time without needing to pay a penalty fee.
Is it the right account for me?
Even with all the benefits in mind, you should not rush into making a decision to sign up for a myRA account. You should only consider this option if you:
- Earn less than $129,000 annually as a single
- Earn less than $191,000 annually as a married couple and are filing jointly
- Are a wage earner and do not have access to a retirement plan
- Want to save for retirement, but have not started yet
It is pertinent that you consider all the requirements well and see if you can bear all the expenses that pertain to starting and maintaining a myRA account over the years.