What you should know about myRA accounts
By Hook Law Center
MyRA accounts are free to open and are sponsored by the government. Account holders can contribute directly from their paycheck. To qualify to open an account, an individual’s income must be less than $129,000, while a married couple’s household income must be less than $191,000.
The accounts will be especially beneficial for people who work part-time and those who work at small businesses that do not offer retirement benefits. However, anyone can sign up for a myRA, even those who do have an employer-sponsored retirement plan.
MyRAs are basically the same as Roth IRA accounts, in which after-tax dollars are invested so that earnings can be withdrawn without paying taxes in retirement. MyRAs will be invested in government bonds only, which means that they currently have lower returns than a typical IRA. However, there are no fees, and since the accounts are backed by the government, it is impossible to lose the original investment.
Because myRAs are intended to be a starter retirement savings account, there are some limitations on how they can be used. Account holders can contribute up to $5,500 per year. If the account balance exceeds $15,000, or if 30 years have passed, the account must be rolled over into a Roth IRA in the private sector.