There are still options for retirement savings without the myRA program.
Were you solely using myRA to plan for retirement?
If so, do not be discouraged.
You can still save for retirement.
According to a recent Kiplinger article titled “Say Goodbye to MyRA, Hello to Roth IRA,” there certainly are other means for retirement saving.
In fact, in the grand scheme of time, the myRA program has not existed very long.
Created by the Obama administration, the myRA was designed to help people without employee-sponsored 401(k)s invest for retirement.
It was available for those with a low income as well as those who made six figures.
Now the U.S. Treasury has decided to end the program.
It seems there was too little participation to justify the governmental bureaucracy to administer it.
What should you do?
Do not cash in your myRA.
You could incur taxes.
You could also receive a penalty for early withdrawal if you are under age 59½.
Plan a rollover instead.
Set up a Roth IRA and move the funds over.
What about if you do not do a direct transfer?
You may still be able to avoid a penalty and taxes if you redeposit the full amount into your new Roth IRA within 60 days.
Set up automatic savings.
With your new Roth IRA set up automatic deposits for every pay period.
The Roth IRA will allow your money to grow tax-free.
There are rules for Roth IRAs.
- You can only deposit up to $5,500 ($6,500 if you are age 50 or older) each year as of 2017.
- You cannot contribute more than you make.
- If you have had the account for longer than 5 years, you can withdrawal your contributions at any time without a penalty.
- If you have had the account for longer than 5 years and are older than age 59½, all withdrawals are tax-free.
- With Roth IRAs there are contribution limits ($118,000 if single and $186,000 if married and filing jointly in 2017).
Whatever you choose to do, the best thing you can do is start saving now.
Reference: Kiplinger (August 2017) “Say Goodbye to MyRA, Hello to Roth IRA”