ST. LOUIS – Millions of Americans without access to a retirement savings plan at work have a new option to save with myRA, a retirement savings account developed by the U.S. Department of the Treasury. St. Louis Mayor Francis Slay and St. Louis Treasurer Tishaura O. Jones support to myRA, a simple, safe, and affordable way to save for the future.
With myRA, there are no costs to open an account, no fees, and no complicated investment options. New funding options recently were announced, making myRA accessible to even more people. Savers were able to initially fund their myRA account from their paycheck via direct deposit, but now they have the option to contribute from a checking or savings account, and from their federal tax refund at tax time.
“Financial empowerment has become as much a part of City services as policing, firefighting, and trash pickup,” Mayor Slay said. “For many people, saving for retirement can be an afterthought. It often comes last to putting a roof over your head and providing for your family. So as a result, people aren't saving -- or aren't saving enough -- for retirement. The City of St. Louis supports myRA because it removes many of the barriers, such as minimum contributions and fees that may have kept people from saving for their future.”
“myRA provides a safe, affordable and accessible option for our part-time employees to pay themselves first and save for retirement,” Treasurer Jones said. “The program is directly related to our mission of educating and empowering St. Louisans to make better choices with their money.”
With the initial pilot phase of the program concluded myRA is now available nationwide with multiple ways for people to start saving:
Paycheck. Savers can set up automatic direct deposit contributions tomyRA through an employer.
NEW: Checking or savings account. Now savers can fund a myRA account directly by setting up recurring or one-time contributions from a checking or savings account.
NEW: Federal tax refund. At tax time, savers can direct all or a portion of a federal tax refund to myRA.
According to a 2015 Federal Reserve Report [www.federalreserve.gov], 31 percent of non-retired people report they have no retirement savings or pension, and millions of Americans lack access to a retirement savings plan at work, or are not eligible.
myRA is designed as a starter retirement account to help bridge the savings gap for many of these workers. It is optimized to appeal to first-time savers, for whom a no-risk, principal-protected investment is more appealing than a higher-risk investment option. As myRA account holders grow their savings, they have the option to transfer to a private-sector Roth IRA with diverse investment options at any time, or transfer to a private-sector Roth IRA once they reach the maximum myRA balance of $15,000.
myRA is a Roth IRA and follows the same eligibility requirements. To participate in myRA, savers (or their spouses, if married filing jointly) must have taxable compensation to be eligible to contribute to a myRA account and be within the Roth IRA income guidelines. Savers can contribute to their myRA accounts as little as a few dollars up to $5,500 per year (or $6,500 per year for individuals who will be 50 years of age or older at the end of the year). Savers can also withdraw money they put into their myRA accounts tax-free and without penalty at any time. Roth IRA requirements apply to the tax free withdrawal of any earnings.
For more information about myRA or to sign up for an account, visit myRA.gov [myra.gov].