A myRA is a new retirement account, introduced by President Obama in his 2014 State of the Union Address
and formalized in a memorandum the next day.
myRAs are expected to be available in late 2014.
(Note the mix of tenses: myRAs will be available in the near future, but most of the details about them are available now.)
A myRA is structured like a Roth IRA:
myRAs also have specific features to make them attractive for new savers:
- Contributions are post-tax, and growth is tax-free
- Participants will (presumably) be subject to the same income and contribution limits as with a normal Roth IRA.
- They are administered by the Treasury Department at no cost
- They are guaranteed to be risk-free
- Opening balance and contributions are allowed to be extremely low ($25 and $5, respectively)
- After your account balance reaches $15,000 (or after 30 years, whichever comes first), you are required to convert your myRA to a privately managed Roth IRA.
In other words, a myRA is a way to ease more people into the stock market, through the comfortable intermediate step of a free and riskless government savings account.
This calculator lets you see how a myRA will work:
Note: for simplicity, the calculator allows a maximum contribution of $5500 annually.
The actual Roth IRA contribution limit varies with your age and income:
see the Roth IRA Rules page for details.