QI read that the Treasury Department is discontinuing the myRA program. What happens to people who had these Roth IRA accounts?
Due to lack of demand, the Treasury Department announced in late July that it will phase out the myRA program, which was designed to help people who don’t have a 401(k) start saving for retirement. The myRA is a government-sponsored Roth IRA with no minimum investing requirements or fees, but there is only one investment option: a special U.S. savings bond that earns interest at the same rate as investments in the Government Securities Investment Fund (G Fund) available in the Thrift Savings Plan for federal employees.
The Treasury Department is no longer opening new myRA accounts, although people who currently have one can continue to contribute for now. The program will wind down over the next few months, and participants will receive more information soon about the deadline for discontinuing new contributions and closing their accounts. If you’ve signed up for automatic investments from your paychecks to a myRA, you’ll need to stop making those contributions soon. Or, if you had your tax refund automatically deposited in a myRA, you can go to “my account” at www.myRA.gov to check on the status. Any myRA account with a zero balance as of September 15, 2017, may be closed automatically.
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You’ll have a few options for the money in your account. The worst choice would be to cash out the account, which could result in taxes and an early-withdrawal penalty if you’re under age 59½. A better option is to roll the money into another Roth IRA with a different IRA administrator. See Retirement Savers, Why the New myRA Plan Isn’t Best for You for more information about other Roth IRAs with low fees, modest investing minimums and many more investment options. Ask the new IRA administrator what steps you should take to transfer the money directly into the new account. If you don’t make a direct transfer, you must redeposit the full amount into a new Roth IRA within 60 days to avoid any taxes or penalty.
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