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MyRA Program Terminated

On Behalf of | Jul 29, 2017 | Firm News

The Obama-era MyRA program was designed for those who didn’t have access to a 401(K) or other retirement plan at work. The Treasury Department is terminating the program, according to the New York Times. The US Treasurer said in a statement that demand for the accounts was not high enough to justify the expense. The myRA program has cost $70 million since 2014, according to Treasury, and would cost $10 million annually going forward.”

President Barack Obama first announced myRA, short for “my Retirement Account,” in 2014 and the plan launched nationwide in November 2015. Since that time 30,000 participants had contributed a total of $34 million to the accounts. It was geared towards lower-income workers who didn’t have a lot of savings and it operated similarly to a Roth IRA. You could contribute after-tax earnings — up to $5,500 a year (or $6,500 for those age 50 or older) — that could be withdrawn tax-free for retirement. There was no minimum to open an account and employees had the option to fund it with automatic payroll deductions or by making payments directly from a checking or savings account.

The myRA was considered a conservative way to save: Funds were invested only in a new United States Treasury retirement savings bond, which was guaranteed to never lose money. The tradeoff was that it wouldn’t likely return nearly what a stock fund might.

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