MyRA

Dictionary Says

Definition of 'MyRA'


A new tax-advantaged retirement account introduced by President Barack Obama in January 2014 as a way for lower-income workers to save for retirement. Workers can open an account with as little as $25 and contribute as little as $5 per month, and employers will deduct their employees' contributions automatically from their paychecks. The maximum balance for a MyRA is $15,000.

Investopedia Says

Investopedia explains 'MyRA'


Because many employers do not offer retirement plans and because traditional and Roth IRAs have account-opening minimums and minimum additional deposit requirements that lower-income workers often can’t meet, President Obama introduced MyRA to give workers who weren’t served by the existing retirement savings plans an easier way to start saving.

MyRA is similar to a Roth IRA in that workers make contributions with post-tax dollars, but contributions grow tax-free and distributions are not taxable. Once the MyRA’s balance exceeds $15,000, the worker must roll it over to a private-sector Roth IRA. By the time the account has reached that size, it will have already met the account-opening minimum for a Roth IRA.

The only way to contribute to a MyRA is through a worker’s employer, and employers don’t have to offer this option. Employers who do offer it will forward employees’ contributions to a plan administrator, who will invest the contributions in Treasury bonds, which are considered safe but have historically low returns that don’t always exceed inflation rates. However, the government guarantees the principal in these investments, so workers should never lose their invested principal. The accounts will have no fees.

 

comments powered by Disqus
Hot Definitions
  1. Valuation

    The process of determining the current worth of an asset or company. There are many techniques that can be used to determine value, some are subjective and others are objective.
  2. Valuation

    The process of determining the current worth of an asset or company. There are many techniques that can be used to determine value, some are subjective and others are objective.
  3. Tech Street

    A term used in the financial markets and the press to refer to the technology sector. Companies like Intel, Microsoft, Apple and Dell are all considered to be part of Tech Street.
  4. Tech Street

    A term used in the financial markets and the press to refer to the technology sector. Companies like Intel, Microsoft, Apple and Dell are all considered to be part of Tech Street.
  5. Momentum Investing

    An investment strategy that aims to capitalize on the continuance of existing trends in the market. The momentum investor believes that large increases in the price of a security will be followed by additional gains and vice versa for declining values.
  6. Momentum Investing

    An investment strategy that aims to capitalize on the continuance of existing trends in the market. The momentum investor believes that large increases in the price of a security will be followed by additional gains and vice versa for declining values.
Trading Center