The lowdown on MYRA accounts

The current POTUS has signed legislation for "lower income" families to be able to put some of their hard earned money into a new type of account called a MYRA account. The primary goal of the MYRA account is a very noble goal indeed, since it is designed to let those that have lower incomes put small sums of money … “as low as $5″ … into the account, and also is supposed to be limited on the downside to be no less than the individual has put into the account.
As far as I am aware, most of the existing IRA and brokerage accounts have no true minimum balance in the account. I recall recently opening both a Roth IRA for my wife, and a brokerage account too, and initially funded both of them with about $15-$20. I then set them up for some automatic deposits for small amounts like $5-$10/month that were later increased in an effort to help us save more for retirement.
What kinds of limits are on the accounts? Well the limits are actually on certain mutual funds that we can invest in. If the account doesn’t have around $2,500 to put into those funds, then they may choose to stop us from purchasing some of those mutual funds. It doesn’t stop us from investing the money into specific stocks or bonds though. And if we wanted to make sure that it the balance never went lower than the money we put into the accounts, we could have the money that we put into the account put into the core part of the account, or a general type of fund that has no minimum dollar amount invested, so that it is effectively a "savings" account.
This appears on the surface to be exactly what the MYRA accounts offer. I don’t remember a mention of the taxable consequences of those accounts, but I would imagine that the tax guidelines aren’t much different than traditional IRA accounts which can be opened for you currently through most IRA/brokerage firms.

If there is something that I missed about the MYRA accounts, please let me know because I would certainly hat to be spreading false rumors. :-)

This entry was posted in 401k, IRA, MYRA, Retirement Savings, Roth IRA and tagged , , , . Bookmark the permalink.

2 Responses to The lowdown on MYRA accounts

  1. Pingback: To curb retirement tax breaks for the rich or not | Rich In The HeartRich In The Heart

  2. Well, it seems the one thing I didn’t see initially was the fact that the investments are limited to government bonds as opposed to stocks, mutual funds, bond funds, municipal bonds, etc.

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