There were so many California residents without any retirement that the state had to step in. They took matters into their own hands and came up with the CalSavers plan. Workers are automatically enrolled into the plan and get withdrawals sent to their IRA’s (Individual Retirement Accounts) for them to manage. Participants can save up to 6,000 if they are under 50 and 7,000 dollars for over 50. With the automatic withdrawal it increases the chances significantly of individuals saving. Employees can take their accounts to any job they go to, and small businesses can now offer it as a benefit. Self-employed and gig workers are often overlooked in saving for retirement, but now they can invest in themselves.
Key Takeaways:
- California has opted into a new program called CalSavers in which 5% of people’s paychecks are put into IRA’s.
- When employees have simple options to save for retirement they will most likely choose to.
- It gives employees more options to move up in jobs and to change companies for better job options because their retirement plans go with them.
“Approximately 7.4 million California workers don’t have access to an employer-sponsored retirement savings option.”
