Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive

News Now

Washington
CU retirement products shine in Forbes
WASHINGTON (3/6/14)--Credit unions once again shone by a comparison of their service to consumers, this time in a Forbes magazine article that discussed the virtues and challenges of the Obama administration's new MyRA retirement account and how it compares with traditional Roth IRAs.
 
Credit Union National Association Chief Economist Bill Hampel was extensively quoted in the broad article, describing the lower-cost retirement account services available at credit unions.
 
The Forbes article listed key selling points of the MyRA, especially for Millennials and others just starting to save: There's no annual account maintenance fee; an account can be opened with as little as $25; additional contributions can be as small as $5 every payday; and, if an employer agrees, savings can be deducted automatically from a saver's paycheck, as they are with 401(k) contributions.
 
One big drawback however, Forbes says, is that the MyRA will not be available until much later this year. As everyone knows, the article says, this very minute is the best time to start retirement savings.
 
That brings the choice back to Roth IRAs, which are not terribly different from the proposed MyRA. However, Forbes warns, the fees and minimums can be significantly higher and, to make it all that much more difficult, it is hard to compare offerings.
 
That's where credit unions come in, says CUNA's Hampel.
 
"(M)ost credit unions will allow you to open a Roth IRA with that same $25 minimum MyRA will have," Hampel points out, adding, "The MyRA is, in essence, a formalized version of what most credit unions already offer."
 
"Moreover," he says, "if you schedule an automatic transfer from your checking account, or if your HR department allows you to set up an automatic transfer from your paycheck before it hits your checking account, you can have amounts as small as $25 or even $5 per pay period regularly transferred into that credit union Roth--again, much like the MyRA."
 
While it's true that the yield on Roth IRAs can be low, Hampel argues that beginner savers shouldn't get hung up on the small number in the "rate of return" category. "There is a time to be concerned about rates, but it's not when you have a really small balance,'' he says.
RSS print
News Now LiveWire
Breaking at #NewsNow: Matz to request revised RBC proposal, new comment period http://t.co/eLtYmzXRWn
16 hours ago
#NewsNow: Oct. 22 webinar will explore role of CDFI #creditunions. http://t.co/op1GV4mrYM
19 hours ago
CFPB announces $10M fine,$27.5M restitution v. Mich.-based Flagstar Bank for allegedly illegally blocking borrowers’ attempts to save homes.
19 hours ago
#NewsNow: Proposed MLA changes could restrict CU payday alternative loans. http://t.co/eKqtyMHD0P
20 hours ago
44 #creditunion professionals earn Development Educators designation #NewsNow http://t.co/GG551ofq31
20 hours ago