Resources and tools
State and federally run plans
The federal myRA program is structured much like a Roth IRA. The money goes in after tax so the account grows tax-free. There are income maximums: $131,000 a year for a single person and $193,000 for a married couple. People can contribute $5,500 annually or $6,500 if over 50. Contributions (but not earnings) can be withdrawn anytime without a penalty.
MyRA isn’t meant to be a stand-alone retirement plan. There’s only one investment option—a Treasury bond that recently earned about 2%. That’s more than the typical savings account but won’t translate to a good-sized nest egg. However, its principal-protected so people won’t lose any of the money they contribute.
Importantly, there are no fees, and no minimum balance or contribution requirements.
Secure Choice (CA)
California is currently working to implement its Secure Choice law, which would provide a voluntary workplace retirement savings plan that enables participation through automatic employee payroll contributions into a personal retirement account managed by the California Secure Choice Retirement Savings Investment Board. It includes:
- Automatic payroll contribution of 3% of salary into a personal retirement plan, with the option to opt out.
- Automatic escalation of contribution rates up to 8% of salary with participant ability to stop or change the rate.
The law applies to employers with 5 or more employees who do not offer an employer-sponsored retirement plan. These employers will be required to offer an employer sponsored retirement plan, or enable employees to make an automatic payroll contribution to their Secure Choice account.
Secure Choice (IL)
Businesses with 25 or more employees will be required to offer a retirement plan in 2018. Eligible workers who are not covered by a plan will be automatically enrolled in the state's Secure Choice program, which willl help them build retirement savings through a 3 percent payroll deduction. Workers covered by the measure are allowed to opt out of the program or reduce (or increase) their payroll deductions if they choose. The state Treasurer's Office is still finalizing implementation of the law. For an FAQ, click here.
Department of Labor: Choosing a retirement plan for your small business