Simply put “myRA” stands for “my retirement account” you can open an account with as little as $25 and contribute $5 or more every payday through automatic payroll deductions. The benefit of this type of account is that it is a “safe” investment and the principle will never go down in value and is backed by the US Government. There are no fees for this type of account and you will earn an rate the same as Thrift Savings Plan’s Government Securities Investment Fund that is available to federal employees. The account will function similarly to a Roth IRA allowing savers to invest after-tax dollars and withdraw money tax-free in retirement. Contributions can be withdrawn tax free at any time and the accounts will be portable from employer to employer.

Initial information suggests the contribution limits will be anyone with household income lower than $191,000. Once the account has reached $15,000 or has been open for 30 years the account will need to be converted into a traditional Roth IRA.

The big item to note for investors as we have talked about before is the “risk” versus “return” discussion. Since these account have no risk (or chance to lose your principal investment) you should expect lower returns rates for 2012 would have been 1.5% and historically in the past 10 would average around 3.5%.

Source: Rosie Rios, Treasurer of the United States video http://youtu.be/e10B_YVw5jw
Source: CNN Money 1/29/2014 “What you need to know about Obama’s ‘myRA’ retirement accounts“