In a visit to the Pittsburgh area last week, President Obama signed a presidential order directing the Treasury Department to create “myRA,” a new vehicle for retirement savings. The proposal was originally announced in the State of the Union address to Congress.
According to the White House Fact Sheet, myRA will work like a Roth IRA account, but have principal protection “so the account balance will never go down in value.”
The new proposal is targeted to workers with low to moderate incomes. Initial investments start at $25, and contributions can be made in amounts as low as $5 through payroll deductions. It will be available to households earning up to $191,000 a year.
With reports showing many Americans are not saving enough for retirement, any new program encouraging retirement savings should be welcome news indeed.