We all know how important it is to save for retirement. Most of us think about saving. But we’ve all seen the statistics — Americans aren’t the best savers. In fact, one in three Americans hasn’t saved a penny for retirement.
It’s not that we don’t want to save, it’s just hard to figure out how to do it when there are credit card bills, child care costs and a host of other expenses to juggle.
For many Americans, getting started is the biggest hurdle.
That’s especially true for those who don’t have access to a retirement savings plan through their employer or lack other ways to save.
But, what if you could start saving for retirement for the cost of a couple cups of coffee each week? Seems manageable, right?
Starting to save is easier than you think
In 2015, the U.S. Department of Treasury introduced a new retirement savings option: myRA. A starter account for retirement savings that’s simple, safe and affordable, myRA was designed for people who don’t have access to an employer-sponsored retirement savings plan.
With myRA, it costs nothing to open an account, and there are no minimum balance or contribution requirements.
That means you can choose to save whatever amount works for your budget – whether that’s $2, $20 or $200. And you can contribute as much as $5,500 each year if you’re under 50 years old.
It gets better: when you save with myRA, your money is safe. There is no risk of losing money since the investment is backed by the U.S. Treasury.
There when you need it
A myRA account is set up like a Roth IRA, which is a special retirement account. You pay taxes on the money you put into a Roth IRA, but pulling money out down the road is generally tax-free.
That generally means once you deposit money into your myRA account, you can make a withdrawal without tax and penalty.
And because myRA is a Roth IRA, savers may also qualify for the Saver’s Tax Credit.
The Saver’s Credit is a tax credit for 10 percent, 20 percent or 50 percent of your eligible contributions to a retirement plan or IRA contributions up to the first $2,000 ($4,000 if married filing jointly). The credit rate depends on your adjusted gross income and your filing status.
myRA account holders with eligible contributions and who meet all of the following criteria should be eligible to claim the credit, which helps reduce their tax bill or increase their refund:
- You cannot be a dependent on someone else’s return.
- You cannot be a student.
- You must be at least age 18.
- You must have adjusted gross income of less than $30,750 ($61,500 if filing jointly, or $46,125 if you file as head of household) if claiming the credit related to contributions for the 2016 tax year. These thresholds are slightly higher for the 2017 tax year.
Save and take control of your financial health
If you’re interested in opening a myRA account, visit myRA.gov/tax or call 855-406-6972. It only takes a few minutes to get started. Once you open an account, there are several ways to start saving:
- Set up automatic direct deposit from your paycheck. Work with your employer(s) to set this up and watch your nest egg grow.
- Make recurring or one-time contributions from your checking or savings account into your myRA account.
- Direct all or part of your tax refund money into your myRA account.
When you prepare your tax return with TaxAct this tax season, you can learn more about your retirement options, including myRA. Simply click on the “Life Events” tab to get tips and guidance about retirement planning.
TaxAct Life Events alert you to important information related to various life changes and the impact on your taxes. Buying a home, getting married or saving for retirement, for example, can change your tax situation.
For the first time, all 19 TaxAct Life Events are available for free to all of our customers, even those using TaxAct Free Online Edition.
With myRA, saving for your financial future is easy and affordable. You can learn more about myRA by visiting myRA.gov/tax.
 According to MyRa.gov, annual and lifetime contribution limits and annual earned income limits apply, as do conditions for tax-free withdrawal of interest. Limits listed are for 2016 and may be adjusted annually for cost-of-living increases.