myRA retirement plan is dead. Here’s some alternatives for your funds
The Treasury Department announced Friday that it is ending the Obama administration’s myRA program, a savings account designed to help low- and middle-income savers put money away for retirement.
The myRA launched nationwide in 2015 as a spinoff of the Roth IRA. It was positioned as a starter retirement account, giving savers the ability to make contributions directly from their paychecks. The account had the same income eligibility requirements as a Roth IRA but offered Treasury savings bonds as the only investment option, appealing to savers who feared losing their principal.
In a press release about the end of the program, U.S. Treasurer Jovita Carranza said a review of the myRA program found it wasn’t cost-effective.
“The myRA program was created to help low to middle-income earners start saving for retirement. Unfortunately, there has been very little demand for the program, and the cost to taxpayers cannot be justified by the assets in the program,” Carranza said in the statement.
That low demand may have been due to the fact that there are other — potentially better — retirement savings vehicles out there, including the Roth IRA. Here’s how to invest for retirement in absence of the myRA.
Transfer your account
The myRA website was quickly replaced with a short FAQ, which noted that the Treasury Department would reach out to current account holders with information about how to close or transfer existing accounts.
The best place to transfer that money is a Roth IRA, which was the basis for the myRA in the first place. The accounts share many similarities — the myRA was intended as a steppingstone to the Roth IRA, and myRA accounts had a balance limit of $15,000, at which point investors would be asked to transfer their balances, anyway.
To transfer your balance, open a Roth IRA and ask the account provider to help you initiate a direct rollover, which will seamlessly move your money between accounts. Most brokers will allow you to quickly open a Roth IRA online.
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Shared From: usatoday.com