How many of you managed to catch the State of The Union address last night? I happened to catch the last 30 minutes or so of the speech and my ears perked up at President Obama’s mention of a “myRA”. He intends to issue an executive order to create a new retirement account vehicle for people to use. The speech was light on details, and unfortunately so was the press briefing/details issued at the time. Thankfully the White House gave more details today. So what is a myRA?
The IRS released the new IRA contribution limits for 2014 and they will remain the same as 2013: $5,500 for those under 50, and an additional $1,000 “catch-up” for those over 50. This isn’t too surprising given the low inflation rate this year (as the base contribution limit is inflation adjusted at $500 increments, though the “catch-up” number is not).
I’ve had the good fortune of working for employers that offered a 401k plan ever since I got my first job out of college. I always knew the importance of saving in a 401k to reduce my taxes as well as lay a foundation for retirement. But I never knew what to do with my 401k once I left those jobs. As a result I did nothing, which is probably the second worst option (right behind cashing it out).