Retirement Investing for Beginners – Meet the MyRA Savings Account
by Susannah McQuitty
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Ever looked into investing in a retirement savings account? If you haven’t, let me fill you in. Retirement savings accounts can be pretty demanding of beginners, because they’re actually investments, not just your average savings accounts. And investments can be tricky to manage, especially for those who don’t have work-provided retirement plans.
Even though retirement accounts like IRAs are generally considered secure investments, there’s still some level of risk. Investing in retirement used to be a lot like getting a first job: you need experience to get a job, but you don’t have experience until you get a job. That’s where the myRA comes in.
Start investing from the ground up
MyRAs help you get on your feet before you dive into the world of stocks and bonds. Basically, a myRA is a type of Roth IRA savings account. That means that make contributions with money you've already paid taxes on, so you don’t pay taxes when you retire and withdraw your funds. This is perfect if you'll have a higher income by the time you retire, since you’ll be in a higher tax bracket.
The difference between a myRA and a Roth IRA is that the money you put into a myRA (your principal) is protected 100%, so it’s not a risky investment. You don’t have to start with a certain amount, and you don’t have to commit to any minimum contributions—just pay what you can afford, when you can afford it, up to $5,500 per year (which comes to about $460 per month) and don’t worry about any penalties for withdrawing early. A myRA is also yours, independent of any third party, so it will follow you from job to job.
After you save $15,000 or reach the 30-year mark (whichever comes first), you’ll have to transfer the money to a private Roth IRA.
Jumpstart your retirement savings
Even though you can’t use myRA forever (since you have to withdraw after $15,000 or the 30-year mark) it’s an awesome way to get started saving for retirement. After that, you’ll be more familiar with the whole process and actually have a chunk of change to throw around (carefully, of course). How’s that for a safe way to start saving for retirement?
To open up a myRA retirement savings account, grab your driver’s license and have your Social Security Number and the name and birthday of at least one person who would inherit your account. Once you’ve got those, head over to myRA.gov to sign up and start investing in your retirement savings account—it’s really that easy!
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