I originally wrote about the myRA in February of 2014. It had just been introduced by the government, and my knee-jerk reaction was to dismiss it as an unnecessary redundant new savings account. I’ve had time to reconsider and the rare opportunity to spend some time with representatives from the US Treasury whose job is it to promote this account.
I left our discussion with a better understanding of how our retirement system continues to fail the small investor. Not all businesses, especially the smaller ones, offer a 401(k) or other retirement plan. This leaves too many people on a path to having little to no savings, and sometimes, all it takes is that first jump-start. Seeing the balance increase over time can itself be a motivator to save more. Even with rates near zero, the myRA returned 2.04% in 2015, as interest is at the same variable rate as investments in the Government Securities Investment Fund in the Thrift Savings Plan for federal employees. So far, over 15,000 people have opened their accounts, and are starting to save. You can think “only 15,000?” or realize that these are 15,000 people who had fallen through the cracks, unable to find a system can could easily accomodate their introduction to long term savings.
The Treasury myRA website is well designed and can answer any question you may have about how you can sign up, deposit to the account, and save your way to the $15,000 it will take to force you to transfer the account to a Roth at a bank or broker.