Treasury Department axes Obama-era myRA retirement savings program

July 28--The myRA savings account program, which started under President Barack Obama as a way to get low- and moderate-income people to save for retirement but was slow to catch on, is being shut down by the U.S. Treasury Department.

The accounts were begun in 2015 and were intended to give people without 401(k)s an easy and safe option for saving for retirement. But the U.S. Treasury Department said Friday the program had cost taxpayers $70 million to run and that savers had only put $34 million into the accounts.

The department will be notifying savers soon that they can move myRA accounts to Roth IRA accounts at private firms.

In a news release, U.S. Treasurer Jovita Carranza said the "cost couldn't be justified and retirement savers have options in the private sector to save for retirement."

Roth IRAs typically are offered by brokerage firms, banks and mutual fund companies.

Unlike the myRA, private firms often charge fees for small accounts and sometimes require an initial investment of at least $1,000. In addition, commissions and other fees may be charged if investors select mutual funds, exchange-traded funds or stocks.

There were no fees or minimum investments required for myRAs, but there was only one investment option. Money in the accounts was invested in a fund of U.S. government bonds.

Under the original plan for myRAs, Treasury said that when savers accumulated $15,000 in a myRA they were going to be required to move the money into Roth IRAs at private firms.

gmarksjarvis@chicagotribune.com

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