Tuesday, February 18, 2014
President Obama’s MyRA plan will not do much for retirement savings
It’s a starter plan, akin to a Roth IRA, that firms without other retirement plans can offer to employees. Accounts will be funded with after-tax payroll deductions, with a minimum investment of $25 to open the account and $5 or more per pay period. There won’t be an employer match, and the accounts will earn interest at a rate pegged to what short-term Treasuries are paying. The principal can never go down. Once an account hits $15,000, the funds will be rolled over tax free to a Roth IRA. A MyRA pilot program will start later this year, with nationwide availability in 2015.
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