How would you like to spend your retirement years on your yacht, while you contribute to all of your favorite charities and make the world a better place with your wisdom and creativity?
If you’re a millennial, you may be thinking, “Who has time to think about retirement when your daily expenses are hijacking all of your money?”
You need to think about your future right now because the experts are estimating that social security will be wiped out by the time Millennials retire.
Here is the sad truth: your retirement years could be the worst years of your life if you don’t plan right now. Start saving a little bit now so you can enjoy a healthy retirement later. Can you afford to save $25 a week? Get creative. Do whatever it takes to protect your financial future. There was a retirement account created under the Obama administration in 2015 to help you overcome your retirement woes.
The government has made saving for retirement easier with the introduction of the myRA.gov (“my retirement account”) account. If you don’t have a 401 (k) retirement or pension plan for your retirement, you may want to look into this account. Business owners and solo entrepreneurs, this may be a good account for you if you don’t have another retirement account to rely on.
Here are some of the benefits:
- There is no minimum amount required to open the account (get that $25 out of your shoe box and start your account!).
- No fees (Yippee!).
- Higher interest rate than most savings accounts and certificate of deposits (we’re talking a rate of 2.250% as of July 2017).
- This account invests in the Thrift Savings Plan (TSP) Government Securities Investment Fund (This is known as the G Fund. The returns invested in the G fund are guaranteed by the U.S. Government. Therefore, you can invest risk-free!).
- The myRA site promises that your account value will not go down (So if you put $10,000 in the account, your balance will never go below $9,999).
- You don’t have to pay taxes on the money when you withdraw your funds (you were already taxed on the money (post tax earnings) before you put it into the myRA account).
- It is eligible for the Saver’s Credit (This is a credit that can reduce the amount of tax you owe to zero if you meet the income limits. If you owe no taxes, you can get all the taxes you paid during the year back in your pocket!).
- It is a form of Roth IRA. You can withdraw your contributions (not investment earnings) to a Roth IRA without penalty at any time for any reason.
- You can contribute up to $5,500 a year (for 2017).
- You can open an account online within minutes!
- Link the account to your checking account to set up automatic deposits (you can deposit weekly, every two weeks, twice a month, monthly, quarterly, semiannually, and annually).
Limitations
You can’t have a myRA.gov account forever (sorry to break the bad news).
You are required to transfer your myRA funds to a private-sector Roth IRA if one of these events occur: your account reaches it’s flirty thirty birthday, you have to say goodbye to myRa.gov (you can not have a myRA account for more than 30 years) or your account balance reaches $15,000. (This is just a starter account to get you on the path towards retirement security. After you have saved $15,000 in your account, you should be ready to play in the big kids league and take advantage of investments that will give you a higher rate of return). Your account will stop earning interest once it reaches $15,000 or become 30 years old.
There are contribution income limits that apply that may make you ineligible to contribute.
For 2017:
- $133,000 if single, head of household, or married filing separately
- $196,000 if married filing jointly
If your income exceeds those amounts, you are not the target audience for myRA and can not contribute.
Go to www.myRA.gov to start your retirement account!
It’s better to have your money in this retirement account rather than parked away in a savings account where you aren’t earning anything for your hard earned money.This is a simplified retirement plan for those Do your research and determine what works best for your money.
Bio: After becoming the first Certified Public Accountant to win the title of Ms. Corporate America 2015 in a pageant held in Orlando, Fl, Charlene created the Career Goddess Academy. She shares her financial, health, travel, and career advice all over the web as a contributor for the Huffington Post, Black Enterprise, The Path Mag, Women on Business, Ms. Career Girl, and other sites. In 2015, she was recognized as the Illinois CPA Young Professional Leader of the Year.
Do you need a blogger for your site or a guest speaker? Contact Charlene at charlene@charlenerhinehart.com.
Disclaimer: It’s important that you do your own independent research before investing in any products. I am not affiliated with the myRA.gov account. This post is to inform you about a new retirement account that has come to the market. It’s up to you to read the website and determine if this is the best option for your retirement needs.