Obama-era retirement plan is dead. Here's an alternative

The Treasury Department announced late last month that it is ending the Obama administration's myRA program, a savings account designed to help low- and middle-income savers put money away for retirement.

The myRA launched nationwide in 2015 as a spinoff of the Roth IRA. It was positioned as a starter retirement account, giving savers the ability to make contributions directly from their paychecks.

The account had the same income eligibility requirements as a Roth IRA but offered Treasury savings bonds as the only investment option, appealing to savers who feared losing their principal.

In a news release about the end of the program, U.S. Treasurer Jovita Carranza said a review of the myRA program found that it wasn't cost-effective.

"The myRA program was created to help low to middle income earners start saving for retirement. Unfortunately, there has been very little demand for the program, and the cost to taxpayers cannot be justified by the assets in the program," Carranza said in the statement.

That low demand may have been because there are other — potentially better — retirement savings vehicles out there, including the Roth IRA. Here's how to invest for retirement in absence of the myRA.

The myRA website was quickly replaced with a short FAQ, which noted that the Treasury Department would reach out to current account holders with information about how to close or transfer existing accounts.

The alternative to a direct rollover is to take a distribution of your account balance.

Because myRA contributions are made after taxes, they can technically be pulled out at any time, free of taxes and penalties.

However, doing so is a blow to the retirement savings you have built, and you could be taxed or penalized if you also withdraw the earnings on those contributions.

Let's say you're 35 and you have $10,000 in the account. That may not seem like much when you consider how much you will need for retirement, but over the next 30 years, it could grow to nearly six times that amount in a Roth IRA, assuming a 6 percent investment return. That's with no additional contributions on your part.

What a myRA didn't offer that a Roth IRA does: the ability to select investments beyond ultrasafe Treasury savings bonds. Roth IRA providers offer a wide selection of investment options, including low-cost index funds and exchange-traded funds.

"A Roth IRA is a great alternative; an investor would likely see better returns because they are moving from one government fund to an open investment architecture," said Steve Minkoff, a certified financial planner in San Francisco.

If you have a long time horizon, investing in an index fund that holds stocks will allow your money to grow much faster.

According to a recent analysis by NerdWallet, choosing a safe vehicle like a savings account over investing in the stock market could result in a $3.3 million difference in how much you are able to accumulate over 40 years.

The low-return savings bonds offered within a myRA are likely to fall short in a similar fashion.

There is one feature of the myRA that can't be easily replicated with a Roth IRA, and that's the ability to make contributions automatically via paycheck deferral.

Ask your bank to make that transfer at the beginning of the month or after your first paycheck of the month, so the money is saved before you have a chance to spend it.

In 2017, you can contribute $5,500 to a Roth IRA, or $6,500 if you're 50 or older. Any contributions you've made to your myRA this year will reduce that limit.