HELP LINE: A simple way to start saving for retirement

A government website helps people begin a retirement savings account and determine their contributions.

WE ALL HEAR a lot of talk about retirement, right?

And traditionally, most of us probably would have defined retirement as something pretty close to “I don’t have to go to work anymore in order to get money,” or something like that, right?

OK. Now, we’ve talked a lot about the fact that the whole retirement thing is changing: how we think about it, how we look at it, what we do or don’t want to do, what we can do, what we have to do and what we choose to do, so we’re not going to rerun that whole tape again today.

Be able to afford it

I do think, though, that most of us can agree on one simple fact: If we have any intention of retiring and that retirement looks anything like my little definition above, then we’d better be able to afford it, right?

Right.

And many of us would also agree that attempting to afford retirement on Social Security alone could be … challenging (OK, I know there are other words and phrases that could apply here, but let’s go with “challenging” for now).

Thus, this is the juncture in a conversation where we get off into pensions and investments, retirement plans, real estate, contracts, savings, etc.

Virtually none of which I’m only kind of qualified to discuss in-depth, but here’s something I do know: Some of us just don’t have some of those choices available to us.

Maybe it’s because of what we do for a living or where we do it or when we started doing it or some past life experiences or some current life experiences or any number of the other 10 million things that can happen during life on Earth.

It doesn’t really matter because the fact is, here we are.

So, shall I finally get around to the point?

OK, ever heard of “myRA”?

Here’s the deal: myRA is a Roth IRA (individual retirement arrangement) — you’ve heard that phrase, or maybe you’ve heard people talk about a “Roth.” Same thing.

A way to stash money

An IRA is a way of stashing money for, presumably, retirement. There are different kinds of IRAs, and Roth is one of those kinds.

I would make “contributions” to my Roth IRA “after tax,” which means after all applicable payroll taxes have already been deducted; in other words, out of my “net” or “take home” pay.

Those contributions (presumably, hopefully) grow because they’ve been invested in something; so, I keep contributing and those funds keep earning and someday, hopefully, I can retire. Or whatever.

Did he say, “Whatever”?

Yes, he did, like: up to $10,000 for a first-time home purchase, or qualified higher education expenses, or due to a disability, or up to the amount of deductible medical expenses, etc.

In other words, you can get on that money for reasons other than retirement, and money that you contributed won’t be taxable because it’s already been taxed (see above).

Now, some of the earnings those contributions enjoyed might be taxable, depending upon what you’re doing with the money and when you’re doing it, but we’re getting in over my head. Besides, I think you get the point.

Now, a lot of us don’t have access to these things because of what we do for a living, where we do it or for whom we do it, so we’ve been sort of … challenged.

The real point of this whole column today is to let you know that you could start a myRA that’s backed by the United States Treasury and earns interest at the same rate as the Government Securities Fund, which was 2.04 percent in 2015.

You can contribute out of your paycheck (or several other ways) $2 or $20 or $200 — whatever you can afford.

It could be a way to get started, restarted, catch up or do something.

“Isn’t there more I need to know about this myRA thing?”

Good heavens yes.

You can go to www.myra.gov and take your time. FYI, there’s no fee to start one of these and there are no ongoing fees.

“So, Harvey, do you think this is a good idea?”

I think it’s an idea for folks who don’t have any others.

I think they’re a good idea for some people, depending, and I think they’re a lousy idea for people who have better ideas or other opportunities.

I mostly think that it doesn’t matter what I think.

I think you need to know that these things exist, then make your own decisions, based on your own life.

I think myRAs could be a tool to help some folks get started and stash some money, be that for retirement or some other noteworthy life experience, and/or maybe to begin to understand how that game is played.

And I think that you don’t have to be a high-roller to be smart.

________

Mark Harvey is director of Clallam/Jefferson Senior Information & Assistance, which operates through the Olympic Area Agency on Aging. He is also a member of the Community Advocates for Rural Elders partnership. He can be reached at 360-452-3221 (Port Angeles-Sequim), 360-385-2552 (Jefferson County) or 360-374-9496 (West End), or by emailing harvemb@dshs.wa.gov.

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