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What is the CalSavers Retirement Savings Program?

Retirement planning is a topic that often takes a backseat in our busy lives. However, it’s an important aspect of financial well-being, and many Americans struggle to save for their golden years.

To address this issue, California introduced the CalSavers Retirement Savings Program, offering a straightforward way for eligible workers to save for retirement. According to the Employment Development Department, employers with one to four employees have a new obligation to provide the program to workers by December 31, 2025.

What is CalSavers?

CalSavers is a state-sponsored retirement savings program designed to help Californians who lack access to employer-sponsored retirement plans. It aims to encourage workers to save for retirement and build financial security for their future. The California Secure Choice Retirement Savings Investment Board administers the program.

Who can participate?

CalSavers is available to private-sector employees who meet specific criteria. Eligible participants include those who work for employers with at least one employee, employees of companies that do not offer an employer-sponsored retirement plan, such as a 401(k) or pension, and employees who are at least 18 years old and earn a minimum amount of income.

How does CalSavers work?

Participation in CalSavers is voluntary for employees. They have the option to opt out if they choose not to participate. Once enrolled, a portion of their paycheck goes to a CalSavers Individual Retirement Account.

The default contribution rate is 5% of the gross pay, but participants can adjust this rate as they see fit. They make contributions to a CalSavers IRA on a post-tax basis, which means participants do not receive an immediate tax deduction. However, the earnings on these contributions grow tax-deferred until retirement. This can provide valuable tax advantages in the long run.

Investment options

CalSavers offers a range of investment options, allowing participants to choose the one that best suits their risk tolerance and financial goals. These investment options include a target-date fund, a conservative fund and a moderate fund, among others.


One of the advantages of CalSavers is its portability. If an employee changes jobs, their CalSavers IRA moves with them. This ensures that individuals can continue to save for retirement consistently, regardless of their employment status or workplace changes.

Low fees

CalSavers is cost-effective with competitive fees. This helps participants maximize their retirement savings without incurring excessive charges.

The CalSavers Retirement Savings Program is a valuable initiative aimed at addressing the retirement savings gap among Californians. It offers eligible workers a convenient and accessible way to save for their future.