Are all your employees eligible to participate in your retirement plan? If some fail to meet your plan’s eligibility requirements, a new account can offer an alternative way to save for retirement.
The new account is a “myRA,” an acronym for “my Retirement Account.”
What’s a myRA? Basically, it’s a Roth IRA for employees who are not eligible to participate in employer-sponsored retirement plans. The difference between a myRA and a regular Roth is that money deposited in a myRA is invested in a U.S. Treasury retirement savings bond. The account balance earns interest and is guaranteed to retain its value.
MyRAs are subject to the same income and contribution limits as regular Roth accounts. That means single employees who earn less than $129,000 during 2014 ($191,000 for married filing jointly) will qualify to make a full or partial contribution. The maximum contribution to a myRA for 2014 is $5,500 ($6,500 for employees over age 50).
What do you need to do so your employees can take advantage of myRAs? Share information about the accounts and make direct deposits from employees’ paychecks to accounts your employees have established. You’re not required to pay any fees, match contributions, oversee the myRA, or file tax or other returns for the plans.
Your employees set up individual myRA accounts online and decide how much they’ll contribute. Employees with multiple jobs can make contributions from each.
If you’re interested in making myRAs available to your employees, please give us a call for more details.