Home    Use Terms    Important Terms and Documents 
About RGT
Wealth Management
Investment Management
Investment Approach & Philosophy
Portfolio Design Process
Manager Selection Process
Helpful Links
Our Team
Financial Briefs
Featured News
Articles of Interest

More Articles  Printer Friendly Version


A New Retirement Account Debuts, But Is It Worthwhile

There’s a new retirement savings account in town.

The “MyRA” (for my IRA), authorized by presidential order, combines the tax benefits of a Roth IRA with investment security. The downside is that returns may pale compared with those of other retirement accounts.

Just like a Roth IRA, contributions are made with after-tax funds, and future payouts may be free of federal income tax. Unlike a Roth, however, you won’t have a plethora of investment options. The MyRA will invest solely in U.S. government savings bonds.

Thus, with this new account, you’re not risking principal but yields will be relatively low. You can keep the account after switching jobs and withdraw funds at any time. However, distributions of earnings before age 59 ½ are taxable; plus, a 10% tax penalty may apply.

As with a Roth IRA, you can currently contribute up to $5,500 a year ($6,500 if age 50 or older). Availability is phased out for upper-income taxpayers. Once your account balance reaches $15,000, you must roll over the funds to a private Roth, in which you will have the usual array of investment choices.

Initially, only employers will offer MyRAs, but it is expected the accounts will be expanded later to individual savers. This new type of retirement plan is targeted mainly at younger workers who don’t have access to plans through their employers. Is it right for you? Consider all of the alternatives.

Email this article to a friend

Roll Over And Play Dead To The IRS
Markets May Not Be Certain, But Experience Is
More Flexibility Allowed In Flex Spending Accounts
Is It Too Late For Roth Conversion?
Count On The Portability Provision
5 Tasty Tips For A Spending Diet
Here’s A Fast And Easy Way You Can Supplement A Will
When Two Out Of Three Ain’t Bad
Crummey Gifts: Spring Into Action
Should You Turn Off A Trust?
Wall Street’s “Top” Firms Were Wrong Again In 2013
Tax Problems? Divide And Conquer
A New Asset Class To Watch — Carefully
How Did The Federal Government Shutdown Affect The Economy?
Results From Financial Calculators Don’t Always Add Up

This article was written by a professional financial journalist for Robertson, Griege & Thoele and is not intended as legal or investment advice.

©2014 Advisor Products Inc. All Rights Reserved.