The government-backed plan is an option for the tens of millions of U.S. workers whose employers don't offer a retirement savings plan. MyRA accounts are open to anyone earning an annual salary of less than $131,000, or $193,000 if they are married and file taxes jointly. There is no minimum to open an account, as with an IRA, and no fee to open one. Payments can go into the plan automatically, directly from a checking or savings account, or from an employer's payroll system, via direct deposit. Any or all of a federal tax refund can be directed into a MyRA account, which is portable from employer to employer.
A MyRA (My Retirement Account) won't return nearly what a stock fund is likely to return over time, but workers face no risk of losing their nest egg. MyRAs will invest only in a U.S. Treasury security guaranteed never to lose value. Users can access the money for emergencies. In short, it operates a lot like a 401(k)—albeit without that crucial match that companies may make on employee contributions—but is effectively a Roth IRA with contributions of after-tax money that can be withdrawn, tax-free, in retirement.
The myRA.gov website notes that "interest earned is the same rate as investments in the Government Securities Fund, which earned an average annual return of 3.19% over the ten-year period ending December 2014." Over the past five years, that rate has dropped to a little over 2 percent, said Treasury officials, noting that"the rate is dramatically higher than what people are able to earn on savings accounts."
