First, it is not the name of your big sister’s friend. It is the newest IRA account out there.
It was announced in 2014 by President Obama in a State of the Union speech. It is designed to give people a chance to start saving for their future.
The myRA is a retirement plan created by the Department of the Treasury. It has no costs, fees, complicated investments or the risk of losing money.
Some of the facts about the myRA are that it is a no cost/fee retirement account that is opened through the Department of the Treasury. The monies are invested in government securities which have earned 2.94% over the last 10 year period. In August of 2016, it will earn 1.50%.
It has the same requirements as a Roth IRA. You can contribute up to $5000 a year and if you are over 50 up to $6500. It is after tax money so there will be no deductions come tax time. The contributions are not tax-deductible and will not be taxed upon withdrawal, just like a Roth IRA.
With the myRA, you can set up automatic contributions in which you can invest as little as $5 a paycheck. This gives you the flexibility to set aside an am0unt that will work with your budget.
You can also make one-time contribution lump sum like a tax return or form a savings account. Also, you can have regular contributions from your payroll via direct deposit or you can do a combination of the two.