WASHINGTON - President Obama's recent initiative to encourage retirement savings has proposed what the administration calls the "myRA."
This new type of retirement savings account is geared towards new savers who may not have a retirement savings option offered through their employer.
The myRA will be available to individuals earning up to $129,000 per year and couples earning up to $191,000 per year.
Accounts could be established with as little as $25 and subsequent contributions will be made via payroll deductions, which can be as low as $5, with an annual cap of $5,500.
There is an account maximum of $15,000 and has a maximum life of 30 years.
The accounts would be portable from job to job and be backed by the full faith and credit of the United States Treasury.
The funds will be invested in the Government Securities Investment Fund (GSIF), which has had an annual return of 2.24% over the past three years according to the fund website, TSP.gov.
The account principle would also be guaranteed by the government, so the account balance would never go down, much like a government savings bond.
Dan Ament, Financial Advisor with Morgan Stanley of Wayzata visited KARE 11 Sunrise with more on who the plan may work best for.