How myRA savings accounts may create a simple solution to Save 

obamaPresident Obama’s proposal to establish myRA Savings accounts will encourage lower to middle-income people to save. myRA is an additional way to save for a rainy day. The government, who guarantees the interest on your account, will be sent your deduction from your payroll check and create the tax-sheltered savings account until it reaches 15,000. At that point, it must be converted to an Individual Retirement Account (IRA). The return will be a low fixed rate (1-3 percent). However, your money will be safe. Unlike IRA or 401K plans, you can take the money back at any time without tax penalty. myRA would offer the ability to accumulate money and provide an avenue to get Americans back on a Savings track. The minimum’s investment is $5 or more to the fund per pay period. A $25 week savings would accumulate $1300 per annum.

Ideally, you could build up the account to $10,000, which is a minimum amount to invest in higher return investments, such as a Market linked Certificate of Deposit. Market Linked C.D.’s are FDIC insured up to $250,000, and must be held 6-7 years to avoid a penalty. They provide great returns and can be written as qualified (IRA) or non- qualified plans. By withdrawing funds before the $15.000 limit, myRA would provide a way to start education savings early and a Market linked CD could provide higher returns after accumulation reaches $10,000. myRA contributions could continue as the Rainy-day fund.
Of course, the earlier that we begin saving, the better off we will be in the future. myRA can make saving easy, because when you don’t have money in your possession, you won’t spend it. Life insurance companies know that automatic deduction is the most stable form of payment.

Extra money to save could be created by the ACA, Affordable Care Act, which is providing large tax credits and lowering the amount which one may pay for their health plan. The tax subsidies may provide additional income to save in a myRA.

With enrollment in the Covered California plans, a Single tax filer can receive tax credits when their income lies between $15,847 and $45,960 on a sliding scale; Couples $21,404 to $62, 040; three family members $26,952 to $78, 120; four family members $32,500 to$94.200 and 5 family members $38,047 to $110,280. The deadline to establish an Obama-care plan is March 26th. It is a great idea to take some of the tax subsidy and invest it for your benefit, and myRA may be the perfect solution.

For more information about these plans, contact Janice Gough, a financial advisor in Palm Springs. She may be reached at janice@goughinsurance.com or by calling cell (650) 342-7744 or bus. (760) 251-7724

Source: Janis Gough

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