New My Retirement (myRA) Accounts Offered by Treasury
September 30, 2015
As directed by President Obama on January 29, 2014 via a Presidential Memorandum (initially announced in his 2014 State of the Union Address), the Treasury Department has created the new myRA retirement accounts.
These new retirement accounts are designed to be starter retirement accounts for individuals who do not have access to, or are ineligible for an employer sponsored retirement savings plan. A myRA account is treated as a new type of Roth IRA and thus follows Roth IRA rules – which include eligibility being based on annual earned income.
Other things to know about a myRA account:
- Accounts are solely invested in government savings bonds that earns interest at the same rate available in the Government Investment Fund of Federal Thrift Savings Plan.
- The annual contribution limit is the same as for other IRA accounts: $5,500 ($6,500 if age 50 or over).
- In order to make a contribution, an individual’s adjusted gross income may not exceed $131,000 ($193,000 for married filing joint).
- Another limitation for the account is that the account balance will need to be rolled over to a private sector Roth IRA once the account reaches $15,000 or has been in existence for 30 years.
A myRA account can be opened at no cost via the Treasury Department’s myRA.gov website and by following the step-by-step instructions.
An individual can contribute to their myRA account in the following ways:
- Directly from their paycheck by setting up payroll direct deposit through their employer. This is the only option available at the present time and is the primary method set up for the program.
- Contribute from another account such as a bank or credit union account through electronic (ACH) transfer.
- Contribute by depositing all or part of a tax refund to the myRA account when a taxpayer files their federal income tax return beginning in the upcoming 2016 filing season.
For more information see the following on the myRA website: