The U.S. Department of the Treasury announced that it will end the myRA (my Retirement Account) program initiated during the Obama Administration due to lack of usage.
The myRA, a tax-deferred Roth IRA offered by the government, was created in 2014 to help people save for retirement. But there was little demand for it and the Treasury found it not to be cost effective. Taxpayers have paid nearly $70 million to manage the program since 2014.
“The myRA program was created to help low to middle-income earners start saving for retirement,” Jovita Carranza, U.S. Treasurer, said. “Unfortunately, there has been very little demand for the program, and the cost to taxpayers cannot be justified by the assets in the program. Fortunately, ample private sector solutions exist, which resulted in less appeal for myRA. We will be phasing out the myRA program over the coming months. We will be communicating frequently with participants to help facilitate a smooth transition to other investment opportunities.”
The review was undertaken as part of the Trump Administration’s effort to assess existing programs and promote a more effective government.
“We are committed to promoting retirement savings, and, as Treasurer, I plan to devote a substantial amount of my time to ensuring more Americans have the tools and knowhow to save for retirement,” Carranza said.
Retirement savers have options in the private sector that offer no account maintenance fees, no minimum balance, and safe investment opportunities, Carranza said.
Senate Finance Committee Chairman Orrin Hatch (R-UT) welcomed the move.
“I appreciate the Treasury Department’s decision to wind down the savings scheme called my Retirement Account, or myRA,” Hatch wrote in a letter to Treasury Secretary Steven Mnuchin
Secretary. “While perhaps well intended, the scheme has not been a net benefit to savers and American taxpayers, and was set up through executive overreach to sidestep the Congress.”