Managing Your Money

You can't shelf this one... MyRA!

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Part of the President’s State of the Union address caught my ears. M-Y-R-A or myRA plan, a new retirement savings vehicle being proposed by the President Obama. Last year, the President’s budget had several retirement savings proposals. However, Congress shelved them all. This year, MyRAs are structured to launch via Executive Order with or without Congressional action.

Immediately following the address, the White House released details of “myRA” in “The State of the Union Fact Sheet: Opportunity for All”.

Quote: “myRA– A New Starter Savings Account to Help Millions Save for Retirement. The President will take executive action to create a simple, safe and affordable “starter” retirement savings account available through employers to help millions of Americans save for retirement. This savings account would be offered through a familiar Roth IRA account and, like savings bonds, would be backed by the U.S. government.”

6 major points you need to know about MyRA's:

1) MyRA’s are a savings account. MyRA's target those without company plans (401(k)s, etc.).
2) Unlike traditional plans with minimums. MyRA's will be accessible with low minimum initial deposit of $25($5 per each additional contribution).
3) MyRA's will have a max accumulation value of $15,000. If that value is reached or 30 years pass, account must be rolled over.
4) MyRA's are structured like a Roth.No deduction for contributions and tax-free withdrawals.
5) Like savings bonds. These accounts will be principal protected and backed by the U.S. government.
6)MyRA's will be invested in US Government Bonds. Investors might want to consider other retirement vehicles, like an IRA if they are looking for greater returns. Keep in mind, greater return often means taking on more risk.

While we don't have all the details yet, it looks like MyRA's are going to be another great step towards helping Americans save for retirement. While it is not going to be enough on its own, MyRA's will be a nice retirement supplement. If you have any questions please contact a financial planner. To find Certified Financial Planner near you please visit:

Bill Harris is a certified financial planner practitioner. He is a member of the board of directors for the Financial Planning Association of MA and an Ed Slott Elite IRA Advisor. He is a co-founder and principal of WH Cornerstone Investments in Duxbury and Kingston. He can be reached at or by calling 1-888-797-9009.

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