The myRA is a starter retirement plan that works like a Roth IRA except there are no fees and account holders can only invest in Treasurys. Once account holders save $15,000 in their myRAs, they must roll them over into Roth IRAs.
Account holders of myRAs and Roth IRAs do not receive a tax break for their contributions, like those made to traditional IRAs and 401(k) plans. However, withdrawals from myRAs and Roths are tax-free while those from traditional IRAs and 401(k) plans are taxed.
More than 10,000 people have opened myRAs and the average contribution is around $50 per pay period since the program’s nationwide launch in November, according to the Treasury Department.
Danielle Vogel, owner of Glen’s Garden Market in Washington, D.C., encourages her 90 employees to use myRAs. “I’m constrained by cash flow and I like that I can provide myRA accounts to my employees at no cost,” said Vogel, a former Senate staffer who started her grocery business in 2013 and participated in the Treasury Department’s pilot program for myRAs in 2014.
Many of Vogel’s employees are in their 20s and 30s and aren’t yet worried about retirement plans as much as other perks she offers, such as free staff meals and stipends for health insurance. “MyRA is a training-wheels version of a retirement plan that allows me to invest in other benefits,” Vogel said.
Some of her employees like the simplicity of the myRA. “I have a retirement account at an old job I still don’t understand,” said Audrey Groce, 25, director of operations at Glen’s Garden Market, who contributes $200 a month to her myRA.
Other workers appreciate how easily they can access funds in a myRA. “With a myRA, I can touch my money if I need to,” said Shana Muhammad, 31, who manages one of Glen’s Garden Market’s two locations and saves $100 a month in her myRA.
