An Obama-era program that developed savings accounts to assist more people to put their money for retirement is shut down by the Treasury Department that regarded this program to be expensive.
This program had around 30,000 participant and was known as myRA and the main intention of this programs was to help people who did not have workplace savings plans and they were informed through email alerting of the closing. The information was they cannot roll the money into an individual retirement account, said the Treasury Department.
President Barack Obama ordered the creation of these accounts three years ago, and it was available by 2015 end. Since then, nearly 20,000 accounts have been opened, and the participants have been contributing a total of $34 million, as per the Treasury. An additional 10,000 accounts also have been opened where the owners have not contributed.
The United States treasurer, Jovita Carranza, said that the demand for the accounts was not high enough to validate the expense. The program has cost since 2014 $70 million, as per the Treasury, and is expected to cost $10 million a year in the future.
The aim of myRA accounts that operated similar to Roth I.R.A. accounts was to promote saving, particularly among the lower-income workers. The account holders could contribute up to $5,500 a year or $6,500 if they were 50 or older. The money would get deducted automatically from users’ paychecks, or they contributed to the accounts by making direct transfers from checking or savings accounts. There was no minimum deposit or a fee.
The closing of myRA is the newest step taken by the Trump administration to reverse Obama-era savings initiatives and investor protections.