myRA Calculator
myRA (my retirement account) is a retirement savings plan devised by the US Government to enable people on low incomes to save for their retirement. myRA is basically a retirement starter plan, it's aim is to get you focused on saving for your retirement, this is achieved by making the retirement saving plan financially affordable. The price of a couple of pizzas and a coffee will get you started with a personal retirement savings plan.
myRA requires you to deposit a minimum opening payment (this is currently $25), with contributions set as a minimum of $5. More importantly, as myRA is designed for those with low incomes and / or just starting a pension, is cost nothing to setup, has no fees and is underpinned by the Department of the Treasury meaning you have no risk of losing your investment. The approach of myRA is both refreshing and fair, providing a good financial opportunity for millions of regular US folk who cannot access 401(k) or have limited retirement funding opportunities. You can read more about myRA here [Opens in new tab].
So, myRA provides you the start to financial security in retirement, once you have reached the myRA threshold, you can continue to save for your retirement with a Roth IRA.
When the myRA balance reaches $15000 (or after 30 years have elapsed if $15000 hasn't been reached) you are required to transfer to a privately run ROTH IRA
myRA has a limit on your annual contributions, generally $5500, although this is dependent on your circumstances. We have added a calculation which confirms your maximum annual myRA contribution below (see "Maximum Annual Contribution" section below).
| Initial opening balance (25.00 minimum) | ||||
| per | ||||
| return rate on your contributions | ||||
| Maximum Annual contribution (see below) | ||||
| The time it will take to accrue 15,000 (or 30 years if 15,000 not reached) | ||||
| Target amount | ||||
|---|---|---|---|---|
| You can calculate your contribution for a specific amount, based on the details above, by entering the amount you require below | ||||
| The total amount you want to save | ||||
| The time it will take to reach your target. | ||||
| Select the correct description of your age | ||||
| Select your situation | ||||
|---|---|---|---|---|
| Select your annual income band | ||||
| Your maximum annual contribution is $5500 | ||||
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How do I contribute to myRA?
It is very easy to pay into your myRA retirement fund:
- Federal Tax Refund: When you file your tax return you may be entitled to a Tax refund. If you are entitled to a tax refund, you can choose to have part or all of your tax refund sent straight into your myRA account. What a great way to build up your pension, after all, its money you have already paid out so are less likely to miss. You can estimate your Federal and State Tax return using the Tax Form Calculator.
- Direct from your paycheck: This is our favourite approach as, by making regular payments from your paycheck you soon get used to the money not being there (so you adjust your monthly budget accordingly) and you get into the habit of saving for your retirement. The best savers are those who commit regularly, why? Simple, they just get used to the money not being there, they probably have a couple of beers, pizzas or coffees each month. Small sacrifice for having a Retirement fund that makes your retirement years financially worry free (or at least, less so). If you want to setup myRA from your paycheck, talk to your employer, they can set up the direct deposit on your behalf.
- Direct from your checking or savings account: You can use this mechanism to setup both regularly payments (weekly, monthly etc.) and make single one off payments. We strongly suggest you make the payments direct from your paycheck if paying regularly as there is less temptation to break the saving habit. You may however have to save this way because you change jobs frequently or simply prefer to manage your own finances. You can also make larger one of investments if you receive a bonus from work or receive a higher income one month and want to put some of that away for future years.
Why choose myRA instead of Roth IRA?
myRA is all about getting you started with a retirement plan. myRA differs from Roth IRA as it has less risk. The money is invested into a single US Treasury retirement savings bond which is underwritten by the US Treasury with a guarantee that it cannot lose money. If you are surprised to hear that pension investments can lose money.... When you invest in a pension, the pension provider users you money to invest in certain financial avenues. This could be stocks, companies and other financial investments. When these investments provide a financial return, the profits are used to provide you with interest on your retirement fund. a private sector Roth IRA does not have the same guarantees so, if the money invested does not make interest (say the investment collapses or generates a loss), your investment will go down. The good news is that there are strong caveats (rules) that control where pension funds can be invested. These rules were refined after the early 21st century financial crashes when a number of banks and investment firms were found to be acting immorally with people's money. Notwithstanding that, investments always attract risk and the money you put into your retirement fund can go down as well as up. myRA is a great deal because it cannot go down; it can be either the same amount you invested or higher with interest. Most savers would kill for that kind of no lose deal, ignoring myRA when you are entitled to it and can afford it makes you a very, very silly person.
If you are interested in myRA, we suggest you have a read through the myRA website, it has some great questions and answers that will help you understand the benefits.
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