A year after President Obama announced his plan for myRA retirement savings accounts, they are finally a reality. According to CNN Money, the accounts are geared toward middle- and low-income Americans who may not have access to a retirement plan otherwise.
Between the years 2000 and 2010, the number of employers that offer retirement fund options for their employees dropped by 20%.
Retirement is the storied conclusion of the American dream, but that future is not as dependable as it used to be. One in four Americans these days believes that they will have to work until the age of 80 to be able to retire comfortably, and 2% of retired Americans are actively seeking employment.
The Wall Street Journal reported last month that sign-ups for the myRA (my retirement account) had begun, but the U.S. Treasury Department will begin promoting the accounts much more in 2015.
A myRA account is essentially a Roth IRA (individual retirement account), which means that people can invest after-tax funds and withdraw them tax-free in retirement. The differences here are that myRa is backed by the federal government and that there are no fees or penalties associated with the account.
There is one caveat here — as long as U.S. return rates stay low, the returns for these investments are going to be low too.