myRA was developed to help Americans without a work-provided retirement savings program start saving money. The program targets single individuals earning below $131,000 or married couples filing jointly earning below $193,000. Since there is no cost to open an account, no fees, and no minimum contributions, myRA is advertised as a no-risk solution for those who haven’t found an easy way to start a retirement plan.
Here are a few details provided by the Treasury:
Savers choose the amount to contribute to their myRA (up to $5,500 per year or $6,500 per year for individuals who will be 50 years of age or older at the end of the year).
The account safely earns interest at the same variable rate as investments in the Government Securities Fund for federal employees, which returned 2.31 percent in 2014 and has had an average annual return of 3.19 percent over the ten-year period ending December 2014.
Savers can withdraw the money they put in without tax and penalty and can withdraw interest earned without tax and penalty under certain conditions.
Savers can choose to transfer or roll over their account balance into a private-sector Roth IRA at any time.
myRA accounts can have a maximum balance of $15,000 or a lower balance for up to 30 years. When either of these limits is reached, the money is transferred to a private sector Roth IRA where savers have other opportunities to invest and grow their savings.
Funds can be deposited into myRA via automatic direct deposit, recurring or one-time contributions from a savings or checking account, or from a federal tax refund. The website even provides a savings calculator to help would-be savers determine how much they will earn in interest over a 3-, 5-, and 10-year period, based on the amount they save each month:
To open a myRA account, go to myRA.gov or call (855) 406-6972.