Los Angeles, CA (PRWEB) February 26, 2014
In the recently held State of the Union Speech by President Obama, myRa has been proposed as a new method to save for retirement and it works like the 401k for self-employed and ROTH IRA in which the contributions are taken after tax and withdrawals will be free from tax. With as little as $5 minimum payment contribution, the proposed new method will be made available to qualified employees of businesses with a certain condition that the said businesses are non 401K companies or don’t provide their employees with 401K or any other retirement plans that are employee-based. Employees who wish to avail myRA can have their own contributions taken directly from their payroll accounts upon the voluntary cooperation from their respective employers.
A private third party company will manage the accounts but myRA is purely a government account with its entire balance being automatically invested into the U.S Treasury Securities in which it could earn about 2.5% a year. The account owner will be given no choice on the investment decisions unlike in the 401k for self-employed. Sense Financial President, Dmitriy Fomichenko says “Self-Directed Solo 401k plan remain to be the best choice for most consumers because of its unlimited investment options and total control." Even though the government promises that there will be zero fees involved with these accounts, Fomichenko noted that "With myRA, account holders are forced to invest in the US Treasury Securities paying low rate of return below inflation."
Further details have not been discussed yet, but since the program is somewhat similar to ROTH IRA, it can be presumed that the maximum annual contribution for this pension plan is the same: $5,500 for 49 and below while $6,500 for 50 and beyond. Also, once the account reaches $15,000 it will then be put to a private ROTH IRA account. With this in mind, we can consider myRa a kind of starter account for another retirement account, or an auto IRA account once it reaches $15,000.
Since the proposal is new and has been talk of the town in the financial sectors, people are curious on how an account holder can have access on their funds before retirement. President Obama mentioned on his speech that funds under myRA can be withdrawn on emergency while the Secretary of Treasury, Jack Lew said that the contributions can be withdrawn any time. Also, since the method is similar to ROTH IRA and that of 401k for self-employed, that could mean the rule on withdrawals of contribution may apply. We are yet to discover the rules for this method as President Obama has tasked the Treasury department to create rules for myRA accounts.
Sense Financial is California's leading provider of retirement accounts with "Checkbook Control": the Solo 401k and the Checkbook IRA. Over the years, they have assisted hundreds of clients obtain checkbook control over their retirement accounts while providing them with the ability to invest in virtually any investment class, including real estate, private lending, mortgage notes and much more without the need for custodian approval.
To learn more about the solutions they provide, please contact: (949) 228-9393.