Human Interest 401(k) vs. CalSavers: what’s a better way to save for retirement?

CalSavers is a state-sponsored retirement savings program that increases access to affordable retirement savings opportunities. In California, it's required that businesses opt-in to the state-run plan or offer some kind of 401(k) retirement plan.

But is CalSavers right for your business? Our guide reviews the differences between the state-provided IRA option vs. a 401(k) plan.

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Is CalSavers your best option?

Over the last few years, California businesses have had to comply with state mandate deadlines. Companies with 100+ employees had to offer a plan by September 2020, while companies with 50+ employees had to offer one by June 2021. Now, companies with 5+ employees have until June 30, 2022 to provide a qualified retirement plan.

While a state-sponsored program like CalSavers is better than nothing, it lacks the flexibility and control businesses expect. CalSavers relies on a Roth IRA, which has a much lower contribution limit compared to a 401(k), impacting the overall growth potential of your plan.

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