What Is a ‘MyRA’ and How Does It Work? [VIDEO]
If you listened to the President during his State of The Union Speech you may recall the part about ‘MyRA’. Just what is a MyRA and how can it help you? Will it be a successful program?
If you do not have a pension or a 401K retirement account, a MyRA could help you build a nest egg for retirement. These accounts, much like 401K plans, are designed to guarantee returns on your investments with no fees and tax-free profits.
The LA Times tells us that there may be problems:
But Obama’s proposal rests on a pair of uncertain assumptions: that employers would be willing to offer the accounts and that financially stretched low-income workers would agree to participate in them.
In contrast to 401(k) plans, companies would not offer matching contributions, typically the biggest inducement for workers to get involved.
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You may still have some questions.
Will this only help higher wage earners and do little for the working poor? Is there such a plan where workers would never lose money? Do lower-income people who have less money to contribute get much less of a tax advantage? Should you just enroll in your company’s 401K plan instead?
It appears that it’s going to be some time before ‘MyRA’ becomes a household phrase.