Posted on June 27th, 2014

President Obama declared he wanted to set up another saving vehicle for people who were in low income groups and who did not have access to savings. This will be a myRAs. Aspects will include:

… As little as $25 to open an account.

… Add to savings through regular payroll direct deposit—$5 or more every payday. Required every payday.

… No fees.

… MyRAs will earn interest at the same variable rate as the Government Securities Investment Fund in the Thrift Savings Plan for federal employees.

… MyRAs will not be limited to one employer—the account will be portable.

… MyRA contributions can be withdrawn tax-free.

… Earnings can be withdrawn tax-free after five years if the saver is 59 1/2.

… Account holders can build savings for 30 years or until their myRA reaches $15,000—whichever comes first. After that, myRA balances will transfer to private-sector Roth IRAs.

…. It will have the effect of being a ROTH IRA where the contributions are not deductible.