Can Obama’s myRA proposal help you with your retirement plan?

Americans are saving less for retirement, although for most people this decrease is not by choice. Currently, there are 75 million Americans without 401k plans or other employer retirement plans. Many people do not save money for retirement, especially low-income recipients who often must devote their income to paying bills or covering a mortgage, resulting in a shortage of savings for the future.

In President Obama’s recent State of the Union address, he announced that he would use his executive authority to direct the Department of Treasury to create myRA. According to the White House, myRA is a “new simple, safe, and affordable starter retirement savings account that will be offered through employers and will help millions of Americans start saving for retirement.” The intent of the program is to help those who do not have access to retirement plans.

The myRA proposal attempts to persuade people to begin saving for retirement by allowing any worker to make small contributions through payroll deductions. myRA’s will be available for single workers making up to $129,000 and couples making up to $191,000. A key feature of the program is that if you change jobs you do not have to worry about making changes to your myRA. Unlike 401k plans, the myRA highlights safety and security with investments that the government guarantees “will never go down in value.”

 

-Caitlin Musselman