Rest in Peace myRA
My Retirement Account (myRA) was initiated in 2014 as a starter savings program, a financial planning tool designed for employees without access to a 401(K) or other retirement plans.But response to the myRA program proved lower than anticipated, and the demand for the accounts wasn’t high enough to justify the expense. According to the Treasury Dept., the myRA program cost $70 million since 2014, and would cost $10 million annually going forward. As a result, the program is being phased out.The basic idea was a good one: essentially a Roth IRA administered by the federal government, it held only U.S. Treasury securities which earned interest at the same variable rate as investments in the government securities fund for federal employees.Intended to be simple, safe, and affordable accounts, myRAs helped low- and moderate-income taxpayers do better budget planning and save for retirement. You could contribute after-tax earnings—up to $5,500 a year (or $6,500 for those age 50 or older)—that could be withdrawn tax-free for retirement.Regulations applied to myRAs remained the same as those applicable to all Roth IRAs. Contributions weren’t allowed when your Modified Adjusted Gross Income (MAGI) exceeded $196,000 if married and $133,000 if single.Contributions weren’t deductible from income tax and qualified distributions (those taken within the guidelines) weren’t reportable as income. Participants could save up to a maximum of $15,000 or 30 years, after which time the money needed to be rolled into a private sector Roth IRA.No new enrollments are being accepted, but existing accounts will remain open and active until the owners receive appropriate notification. The Treasury Dept. recommends account holders log into their accounts or contact customer service to confirm their contact information is current and complete.For more information visit https://www.myra.gov/.For ways to save on taxes, contact the tax accounting professionals at Patrick & Robinson CPAs: Office@CPAsite.com or 904-396-5400.
