During his 2014 State of the Union address, Pres. Obama directed the Department of the Treasury to create my Retirement Account “myRA” — “a safe, simple, and affordable “starter” retirement savings account that will ultimately help millions of Americans begin to prepare for retirement”.
Later in the year, the US Department of treasury issued a news release announcing the official launch of myRA.
Final regulations were later issued outlining the rules and regulations that apply to myRAs.
The following are 10 of the key facts one should know about myRAs:
- The contribution rules are the same as those that apply to a Roth IRA. Therefore, in addition to an individual being required to have eligible compensation in order to be eligible to make a contribution, contributions are subject to the modified adjusted gross income (MAGI) limits. MyRA contributions must be made by the owner’s tax filing due date.
- MyRAs are eligible for the savers credit.
- The Roth IRA distribution rules apply to myRAs. As a result, myRA owners are not subject to the required minimum distribution (RMD) rules; but beneficiaries are subject to the beneficiary RMD rules that apply to a traditional IRA when the owner dies before the required beginning date.
- Individuals who want to open a myRA must do so at www.myRA.gov . The following information is required to open myRA: Social Security number (SSN), Driver’s license, state ID, U.S. passport or military ID, and Name and birth date of at least one beneficiary. Individuals who do not have SSNs, but have Individual Taxpayer Identification Numbers (ITIN) may contact myRA customer support to complete enrollment (customer support can be reached at 855-406-6972 or TTY/TDD 855-408-6972 or International 1-414-365-9616.)
- Contributions can be made to a myRA by payroll deduction, by automatic debit from the individuals sit checking or savings account, and are by direct deposit of a tax refund from the IRS.
- When the balance reaches $15,000 or if it has been opened for 30 years, whichever comes first, the myRA must be moved to a Roth IRA or distributed to the owner.
- MyRAs can be transferred to a Roth IRA. There is no limit on the number of times a transfer can be done during any period.
- MyRAs can be rolled over to a Roth IRA. Under this provision a distribution from a myRA must be rolled over within 60 days of receipt. An individual is allowed to perform an IRA to IRA rollover only once during a 12 month period. All of an individuals traditional IRA, Roth IRA SEP IRA, SIMPLE IRA, and myRAs are aggregated for this purpose.
- With two exceptions, rollovers and transfers may not be made to myRAs. The exceptions apply to a beneficiary transfer from the decedents myRA the beneficiary’s myRA, or a transfer due to the divorce to the receiving spouses myRA.
- MyRA contributions are invested in United States Treasury savings bond, which earns interest at the same variable rate as investments in the Government Securities Fund for federal employees.
Resources for individuals:
|To open your myRA||Open your myRA here. You will receive an email confirmation, and a welcome packet will be sent to you in the mail.|
To make your myRA contribution
“From your paycheck
It may take up to two pay periods before you see the first deposit from your paycheck in your myRA.
From your checking, savings, or another type of account
Resources for employers:
Employers are not required, but are encouraged to provide their employees with information about MyRAs, and provide them with assistance or a possible. This includes helping employees set up direct deposit to their myRAs through payroll deduction.
Employer resources are available here