Beatriz Navarrete, human resources manager at Coral Gables La Salle Cleaners, has an important message for her employees about saving for retirement: “It’s never too late. As long as you’re working, you need to save. Period.”
We all know we should be saving for the future, but for too many workers that is easier said than done. Many are understandably focused on day-to-day expenses for their families, or are afraid of losing money on risky investments. Others just don’t know where to get started, or keep putting off opening a retirement account.
Not saving enough is a problem for families across the country. In fact, 31 percent of non-retired people nationwide say they have no retirement savings or pension whatsoever. And among workers who do not participate in a 401(k) or other defined contribution plan, 42 percent say it’s because their employer does not offer one.
In Miami, the need is particularly high. Miami ranks third-lowest of over 100 U.S. cities in access to employer-based retirement savings accounts, according to new research from The Pew Charitable Trusts. Only 37 percent of the population in the broader metro area has access to a retirement plan at their job, and 31 percent are actually contributing to a plan.
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Among Hispanics, the need is even greater: 69 percent of Hispanic workers in Florida lack access to an employer-sponsored retirement plan.
To help address this issue, late last year, the U.S. Treasury launched myRA, or My Retirement Account. myRA is a Roth IRA designed to provide a simple, safe, and affordable savings option for those without access to a plan through their job. With myRA, there’s no cost to open an account, no fees, no minimum balance or contribution requirements, and no risk of losing money.
myRA is working well for workers at La Salle Cleaners. Beatriz encourages her employees to make plans for the future and said was excited to learn that employees can contribute any amount they want: as little as $10 a week, or even less, if that’s what gets them in the habit of saving. “You are saving for yourself and your future,” Beatriz said.
For many, the key to saving is to simply take the first step. myRA empowers account holders to begin building savings habits and to gain greater financial confidence as they watch their savings grow. Because myRA is designed to be a starter account, savers can transfer their balances to private sector IRAs, where they can continue to save.
The current tax season presents a great opportunity for those receiving tax refunds to start saving. If you’re one of them, consider taking a few minutes to sign up for a myRA account online at myRA.gov.
You can fund it with any portion of your tax refund, a deposit from your checking or savings account, or from your paycheck via direct deposit. Savers can make contributions of as much or as little as they want (within Roth IRA limits). Since the investment is backed by the U.S. Treasury, it safely earns interest with no risk of losing money. In case of emergency, contributions can be withdrawn anytime without tax or penalty.
myRA is an easy way for workers who lack access to employer-sponsored savings plans to start saving and take the first steps toward a financially secure future. To learn more about myRA or to open an account, visit myRA.gov.
Richard Ludlow is myRA executive director at the U.S. Treasury.