Someone pointed me to this source. Here's what I found:
Seems like anyone can invest as long as their household income falls below $191,000 a year.
It's interesting that MyRA allows savers to invest after-tax dollars and withdraw the money in retirement tax-free. The account will only invest in government savings bonds. So it will be a low-yield investment like the Thrift Savings Plan's Government Securities Investment Fund (TSPGSIF) say making 3.6% that occurred from 2003 to 2012. Doesn't that barely keep up with inflation?
There's taxes and possibly a penalty if you withdraw before 59 1/2. Backed by the U.S. government so savers never lose their principle investment. Unless of course the government goes bankrupt... No investment is 100% guaranteed.
People can invest initially as low as $25 and monthly as low as $5 a month... with maximum contributions of up to $5,500. Once the balance hits $15,000 or after 30 years it is rolled over to a private sector Roth IRA. Unlike a Roth IRA the MyRA is something employers can offer directly to employees. Interesting.
It seems like a limited version of existing Roth IRA plans already in place. And you can't do both a MyRA and Roth IRA from what I understand. Perhaps as some would argue this is a way that the President found to get around Congress's perceived inaction? Perhaps one of President Obama’s better proposals?
A step in the right direction it looks like as it gets people saving. But it still needs work as seems incomplete.
Also the 3.6% projected earnings is pretty low. Living frugally and saving is more of a mindset, pattern, or habit people develop. People who are struggling financially may not have the mindset of saving $25 or even $5 a paycheck.
What do you think? Do you have a 401k, Roth, Roth IRA, or are you considering starting a MyRA investment? Leave a comment!
Follow me on Twitter! @JWKEagle
Looking for a particular topic? Please check out the new Table of Contents to see posts listed by topic.