Who is looking out for your best interest for retirement?
A new retirement savings account is available from the U.S. Department of Treasury.
Who is making sure you will have enough income in your retirement years? The answer has to be you. You may already have a retirement plan with your employer. But if you don’t, Michigan State University Extension wants to inform you of a new option.
It’s called myRA. myRA is a new savings option which was just launched by the U.S. Department of Treasury. According to U.S. Treasury Secretary Jacob J. Lew, The plan is designed to remove common barriers to savings and give people an easy way to get started.
The new retirement savings account has no costly fees, no complicated investment options and no risk of losing money. There are a couple of ways to set up the account. You can fund your account from your pay check through direct deposit or you can set up recurring or one time contributions from your checking, savings, or another type of account.
Another available option is to direct some or or all of your federal income tax refund to your myRA account when you file your taxes.
Some advantages to this account are:
- You are in control. You will set up automatic contributions. If you changes jobs, the account stays with you. Also, you can withdraw the money you put into your account at any time without paying tax or penalties (there are conditions for tax-free withdrawal of interest).
- It’s safe. The investment is backed by the United States Treasury. Your account safely earns interest. (Interest is earned at the same rate as investments in the Government Securities Fund)
- It’s affordable. It fits your budget. The myRA costs nothing to open and has no fees. You can contribute an amount you choose whether it be $5, $20, etc.
There are limits as to how much you can contribute each year. You can contribute up to $5,500 per year (or $6,500 per year if you are 50 years of age or older at the end of the year).
The website, myRA-my Retirement has answers to frequently asked questions, other resources, and section where you can sign up.
If you have not started saving for retirement, the time to start is now. Check out this new option and start looking after your retirement.
For more information on making money decisions for retirement, credit, buying a home and other money related issues, check out the MI Money Health website.