Way back in February 2014, I penned a blog about a new option for workers whose employers did not have a workplace savings plan. It was dubbed the myRA and was designed as a starter savings account. President Obama discussed the new savings option in his State of the Union Address last year and the U.S. Treasury launched a small pilot program for the free accounts last month. The program is now open to anyone who has direct deposit for their paycheck.
The U.S. Treasury has put together a comprehensive website that dives into all the gory details of myRA, for both individuals and employers. It can be found at: http://www.treasurydirect.gov/readysavegrow/readysavegrow.htm
Melanie Hicken, a CNN Money contributor, has written a quick and easy to read summary of the new savings plan.
The Bottom Line
I reiterate what I posted back in early 2014 … Given the numerous economic and social benefits of employer-sponsored retirement plans, the myRA meets the needs of those who are not currently covered by an employer. The myRA is exactly what it bills itself out to be; a simple, cost effective way for an employed person to save for retirement. While the investment options are limited to a single asset class, a U.S. Government bond fund, the account is guaranteed to never go down and, once certain thresholds have been met, the investor can roll the balance of the account into a private sector Roth IRA. All in all, anything that allows a person to get save for retirement is a good idea.