Workers should be able to sign up for the accounts by the end of the year.
The starter retirement accounts, a first for Treasury, are called the "myRA." They will earn modest returns in exchange for government backing, meaning account balances will never go down in value. Interest will likely be 1 percent to 5 percent a year.
It's part of the government's effort to address a bleak statistic: More than half of all U.S. workers, or about 65 million people, don't have access to an employee-sponsored retirement savings program such as a 401(k).
That's a serious impediment to building retirement funds, experts say.
The myRA "sounds pretty simple," said
Persico was among a small group of business professionals and government leaders at the Mall of America on Friday for a Treasury outreach on the new product. Bellagala is a wedding services provider that employs a lot of twenty-somethings such as DJs. and hair dressers, Perisco said, and he expects a lot of interest in the program.
"It's amazing how many people come into our business and ask about it," she said. "It's a benefit they are looking for."
The push is a new one for Treasury, which has never offered a retirement savings product before. But the brand is strong, Miller noted.
The accounts are modeled after popular Roth IRAs but will be handled by Treasury. The variable interest rate will be the same that federal employees receive through the
The myRA will be free to open, carry no fees and available to anyone with an annual income of less than
Withdrawals can be made tax free after five years or anytime after the saver is 59?1/2 years old.
Employers don't contribute or administer the accounts, they just have to offer the direct deposit. Since the accounts are not tied to a single employer, workers can more easily take them from job to job. For more information, go to www.myra.treasury.gov.
When an account reaches
In an interview
"If you save
Treasury's goals this year are modest. Miller said she expects just 50 companies around the country to sign up for the pilot by the end of the year. "Next year we want to scale."
(c)2014 the Star Tribune (Minneapolis)
Visit the Star Tribune (Minneapolis) at www.startribune.com
Distributed by MCT Information Services