With most employers having moved away from pension plans, saving for retirement on your own is more important than ever. The federal government's new MyRA aims to boost retirement savings rates, but how does it really work?

In the following video, Dan Caplinger, The Motley Fool's director of investment planning, goes through the basics of the MyRA. He notes that the key to the plan is its ability to make small contributions of as little as $25 to start and $5 for future contributions. Once the total hits $15,000, savers must take the money and open a regular IRA account at a broker. Dan notes that the key benefit to MyRAs is the lack of fees. Even though Schwab (NYSE:SCHW), E*Trade Financial (NASDAQ:ETFC), TD Ameritrade (NASDAQ:AMTD), Scottrade, and many other discount brokers offer low-fee alternatives to those able to make regular automatic monthly contributions, the MyRA is even more flexible in accepting smaller contributions to get invested in a bond-equivalent investment option.

Dan Caplinger has no position in any stocks mentioned. The Motley Fool recommends and owns shares of TD Ameritrade. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.