Treasury Launches myRA Accounts Nationwide
After successful completion of a pilot program, the U.S. Treasury launched the myRA retirement savings account nationwide. President Obama created the myRA program in 2014 and Treasury conducted a year-long pilot program. myRAs are intended to serve as starter retirement accounts for populations underserved by traditional retirement savings vehicles.
Amounts in myRAs will be invested in short-term securities backed by the U.S. Treasury and will earn interest at the same variable rate as securities invested in the Government Securities Fund available to federal employees. Funds will continue to earn interest until either the balance reaches the maximum of $15,000 or 30 years pass from the date the myRA was first funded, whichever event occurs first. At that point, the account owner will have the option of transferring the balance to a Roth IRA managed within the private sector. In the meantime, the myRA account owner pays no administrative fees.
Individuals who fund a myRA during the 2015 tax year may contribute up to $5,500 to the account ($6,500 for individuals age 50 or older), unless their adjusted gross income (AGI) exceeds $116,000 (single filers and heads of household) or $183,000 (married joint filers). For 2015 the $5,500/$6,500 maximum contribution is reduced for individuals with income between $116,000 and $131,000 (single and head of household filers) or $183,000 and $193,000 (married joint filers). No contribution at all is allowed for single filers or head of household filers with income above $131,000 (or for married joint filers, $193,000) for 2015.
Individuals in the pilot program could contribute to a myRA only through direct deposit of funds withheld from their paycheck. Treasury now allows working individuals to set up recurring or one-time contributions from their personal checking or savings account. In addition, taxpayers may contribute a portion or all of their federal tax refund to a myRA account.