Americans have a new way to start saving: Introducing myRA

July 2017 update: The U.S. Department of the Treasury has decided to phase out the myRA® retirement savings program and the program is no longer accepting new enrollments. However, existing accounts remain open and accessible at this time. Funds in myRA accounts remain in an investment issued by the U.S. Department of the Treasury. View the press release.

The millions of Americans without access to a retirement savings plan through work now have an easy way to start saving. The U.S. Department of the Treasury’s myRA (my Retirement Account) gives people a simple, safe, affordable path to retirement by breaking down common barriers to saving.

7 ways myRA benefits users

  1. myRA is a Roth IRA which offers certain tax advantages1
  2. It costs nothing to open an account, and there are no fees
  3. Users contribute an amount of choice ($2, $20, $200 – whatever fits the budget!)1
  4. myRA carries no risk of losing money
  5. There are no minimum balance requirements
  6. The account safely earns interest2
  7. Users can withdraw the money they put in without tax and penalty2

Once a myRA user has accumulated some savings, they can transfer or roll over their myRA to a private-sector Roth IRA – at any time – to continue the savings journey. Accounts can be funded directly from paychecks, checking or savings accounts, or federal tax refunds.

Visit the myRA website to learn more, including stories of how businesses are already sharing the program with employees. For service providers, businesses, and tax professionals that want to share this program with their networks, Treasury also offers toolkits to help spread the word.

The value of saving

The American economy is only as reliant as the American household. Examine the systemic causes of financial insecurity and learn about emerging solutions in What It’s Worth: Strengthening the Financial Future of Families, Communities and the Nation, a new book published by the SF Fed and CFED.

What if saving could start with the first paycheck? Explore findings from the first quasi-experimental design study of a youth financial capability initiative seamlessly integrated into a youth workforce development program. The program, MyPath Savings, supports low-income working youth to bank, save, and build their financial confidence through a comprehensive model that includes financial education, goal-setting, and non-custodial accounts.

Financial insecurity affects every facet of life. In the SF Fed’s 2015 annual report, What We’ve Learned…and why it matters, SF Fed Community Development’s David Erickson and Laura Choi sit down with President John Williams to discuss the fragility of American household finances and how to get more families on the road to economic opportunity.

1. Annual and lifetime contribution limits and annual earned income limits apply, as do conditions for tax-free withdrawal of earnings. Limits may be adjusted annually for cost-of-living increases.

2. Withdraw interest earned without tax and penalty five years after your first contribution if you are over age 59 1/2 or meet certain other conditions, such as using the funds for the purchase of your first home. *Accounts earn interest at the same rate as investments in the Government Securities Fund, which earned 2.04 percent in 2015 and had an average annual return of 2.94 percent over the ten-year period ending December 2015.

The views expressed are not necessarily those of the Federal Reserve Bank of San Francisco or of the Federal Reserve System.

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