United States

myRA–A new retirement savings account


In his State of the Union address, President Obama introduced a new retirement savings account, the “myRA.” This new retirement account combines features of the currently approved payroll-deduction IRA and adds a government-guaranteed rate of return.

Following the State of the Union address, the president issued an executive order instructing the Secretary of the Treasury to complete the development of the myRA by Dec. 31, 2014. Though not all of the details are yet known, myRAs will be structured as follows:

  • Employers will have a choice to participate in the program (with a pilot program scheduled to begin mid-2014).
  • The account will be a Roth IRA account.
  • As the myRA is a Roth IRA account, participants will not receive a current tax deduction for their contribution. However, like with any Roth account, participants can withdraw their own contributions tax- and penalty-free at any time. In addition, the account is fully portable as employees change jobs.
  • The initial required contribution will be $25, with employees having the ability to make ongoing payroll-deduction contributions of as little as $5.
  • Most importantly, participants will be offered an investment return guaranteed by the U.S. government. In this case, the account will earn interest at the same variable interest rate as the federal employees’ Thrift Savings Plan Government Securities Investment Fund.
  • The income limits for contributions to a myRA will be the same as those for a regular Roth IRA. Currently, Roth IRA contributions are permitted in the case of single individuals with income of up to $129,000 and married couples with income that does not exceed $191,000.
  • Individuals can participate for a maximum of 30 years or until they accumulate $15,000, at which point they will be required to transfer their balance to a private sector Roth IRA.
  • Investment earnings will be tax-free upon withdrawal under the same conditions applicable to any other Roth IRA account.

The Treasury has added consumer information about these new accounts at www.treasurydirect.gov/readysavegrow. This website also provides information about buying U.S. Savings Bonds and other Treasury securities, as well as discussions about the value of savings. The website aims to persuade parents, educators, employers and financial institutions to encourage the development of a savings culture in America.

The myRA is a modest attempt to increase America’s retirement readiness. Its modest nature is necessary because the myRA exists by virtue of executive order and not through Congressional action, which would be required to more substantially reform the existing retirement plan landscape.

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