Jim is a temporary full-time employee at an agriculture business; his job for the summer is to work with the grounds crew running a lawn mower. Nancy is going to start working part-time for the local grocery, stocking shelves and learning how to run the cash register. Both individuals would like to “save” a portion of their income. I hope they know about and will consider the new MyRA, a Roth account available from the US Treasury. https://myra.treasury.gov/about/
The new account is available to anyone who is a wage earner and doesn’t have access to a retirement plan at work — in other words, anyone like Jim and Nancy who are temporary workers or work part-time. There is an income cap of $131,000 for individuals to use the plan. There are no fees for management and the Treasury is paying 3.19% return. Right now enrollment is limited to individuals whose employers use direct deposit for pay.
Why is this something to consider? Because you can withdraw what you’ve contributed after 5 years with no taxes or penalties. So Nancy, who is 16, would have an emergency account when she is 21 to pay for the cost of moving to take that first job after college graduation. Jim ,who is 18, will be 23 in five years and might be planning to get married and buy his first home. First time home owners can withdraw both contributions and earnings tax fee. Even if they don’t use the account in these ways, they have a decent return on their savings. What’s more, that savings won’t put a dent in any financial aid they qualify for when going to school, and they will have the added flexibility a Roth account provides when making financial decisions in retirement.