New Retirement Savings Program Will Provide Safe, No-Fee Starter Accounts

According to the Federal Reserve Board’s recent publication, Report on the Economic Well-Being of U.S. Households in 2013, 31 percent of respondents in a national study reported having no retirement savings or pension, and more than half (54 percent) of those with income with incomes under $25,000 reported the same.  Compounding this lack of preparedness is the reality that many employees (35 percent) in the United States who work for private companies also lack access to an employer-sponsored retirement plan, according to the U.S. Bureau of Labor Statistics.  What’s more, access isn’t provided evenly across all wage-earners.  While 85 percent of those in the highest wage-earning quartile had access to retirement plans, only 38 percent of those in the lowest quartile had access in 2014.

For more information, go to:

www.treasurydirect.gov/readysavegrow; or www.myra.treasury.gov

Teaching Suggestions

• Ask students if the myRA program is available to them whether they are full-time or part-time employees.
• What are the eligibility requirements for myRA and what is the sign-up process?
• Can employees who change jobs continue to add savings to an existing myRA account?

Discussion Questions

1. Why must many individuals, especially those from low-and moderate income households, make reluctant but deliberate choices to meet short-term needs at the expense of long-term goals?
2. Will the new myRA program be particularly attractive to low-and moderate income households?
3. What are expected key features of the myRA programs?