President Obama creates new 'MyRA' retirement accounts
Updated On: Jan 29 2014 04:33:40 PM CST
President Obama has signed an executive order creating a new kind of retirement account.
The "MyRA" is a starter retirement account someone can open with as little as $5 from their paychecks.
Local financial experts said if you are thinking about starting a retirement plan, you should do your homework, especially before filing your taxes this year.
President Obama said the MyRA is a new way for working Americans to start saving for retirement.
"MyRA guarantees a decent return with no risk of losing what you put in," the president said.
MyRA is geared toward workers whose employers don't offer a plan. It would utilize automatic tax exempt contributions.
White House officials said MyRA will be backed by U.S. savings bonds.
Laurie Siebert, Valley National CPA and certified financial adviser, said the plan is a good idea for people who are just starting to save but want to be ready for retirement.
"Social Security is definitely not going to be enough to live on, so we have to change that mindset," said Siebert.
Siebert said the only risk is that savings bonds only offer 0.1 percent interest. She said some other financial vehicles may offer more return, but may be subject to fees and, in some cases, market fluctuations.
Siebert said some first-time savers can get a tax break for saving through the retirement savings contribution credit.
For example, a single person making less than $17,750 a year could take 50 percent of his retirement contribution off of his 2013 taxes, up to $2,000.
The tax credits also apply to married and head-of-household tax filers.
Seibert said people have until April 15 to start or contribute to a retirement account for the 2013 tax year.
"If you are below the income thresholds for this credit, it could be a significant tax savings," said Siebert.
The White House is expected to release more details about MyRA soon.
The president said it will allow people to begin saving even if they can't afford a large initial investment.
Copyright 2014 WFMZ. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
Crash involving overturned truck closes Route 222 in Richmond
Bank robbery suspect, getaway driver nabbed after police pursuit
Fire destroys well-known restaurant in Poconos
Workers sickened by unknown chemical in Northampton
Police: Wrong-way driver on Route 22 slammed into 4 cars, 5 people hurt
Pair arrested in carjacking crash that killed 3 children
AG warns of several phone scams making the rounds
Suspect in killings of 2 people in Idaho arrested in Reading
Police: Oversized truck may have damaged covered bridge
Man arrested over hidden cameras in restrooms