CalSavers Explained: What California Workers Without a 401(k) Need to Know
What is CalSavers and do I have to participate?
CalSavers is a California state-run Roth IRA program for workers whose employers don't offer a retirement plan like a 401(k). If your employer is registered, you're automatically enrolled, but you can opt out at any time through calsavers.com. Opting out means you stop contributing, but the state may re-enroll you periodically unless you opt out again.
How much can I contribute to CalSavers in 2026?
CalSavers uses a Roth IRA structure, so contributions are subject to IRS Roth IRA limits, which are considerably lower than 401(k) limits and can change year to year. Income limits also apply. The default contribution rate is a percentage of your gross pay, but you can adjust it. Check irs.gov or calsavers.com for current limits specific to your income level.
What happens to my CalSavers account if I change jobs?
Your CalSavers account belongs to you, not your employer, so it stays with you when you change jobs. If your new employer offers a qualified retirement plan like a 401(k), you won't be eligible to contribute to CalSavers through that employer, but your existing account and its balance remain yours to manage at calsavers.com.
Is CalSavers better than a 401(k)?
A 401(k) generally allows much higher annual contributions and may include an employer match, making it more powerful for most workers. CalSavers is designed for workers who have no employer plan at all, not as a replacement for a 401(k). If your employer offers a 401(k), that's typically worth using first, especially if there's a match involved.
Can self-employed Californians use CalSavers?
Yes, self-employed Californians and sole proprietors can enroll in CalSavers voluntarily through calsavers.com. However, self-employed workers also have access to other retirement accounts, such as SEP-IRAs and solo 401(k)s, which allow significantly higher annual contributions. A tax adviser can help you compare which option fits your situation and income level.
Millions of Californians work for small businesses that don't offer any retirement plan, which means no employer match, no 401(k), and no automatic way to save for the future. California's CalSavers program exists specifically for those workers, and since the state's phased employer mandate has rolled out, the number of employees who should be enrolled has grown substantially. Whether you've been auto-enrolled and aren't sure what you're in, or you've never heard of it, here's what the program actually is and what it means for your money.
Related: CalSavers Explained: What California Workers Without a 401(k) Need to Know · What California Workers Without a 401(k) Need to Know About CalSavers
What CalSavers Is and Who It's For
CalSavers is a state-administered Roth IRA program run by a board that includes the State Treasurer and State Controller. It's designed for private-sector California workers whose employers don't offer a qualified retirement plan, like a 401(k), 403(b), SEP-IRA, or SIMPLE IRA. Self-employed workers and sole proprietors can also enroll voluntarily.
Employers with five or more California employees have been required to either offer their own qualified retirement plan or register with CalSavers, with the mandate phasing in by employer size over several years. If your employer is registered, you're automatically enrolled unless you opt out. The money comes out of your paycheck, after taxes, and goes into your CalSavers account.
How the Account Actually Works
Because CalSavers uses a Roth IRA structure, your contributions go in after-tax. That means you don't get a tax break now, but qualified withdrawals in retirement are generally tax-free under federal and California law. The program sets a default contribution rate, which has been 5 percent of gross pay, and it's scheduled to step up automatically over time unless you change it. You can adjust your contribution rate or stop contributions at any point through the CalSavers portal.
Your money is invested in a default fund based on your expected retirement year unless you choose something different. CalSavers offers a small menu of investment options, including a capital preservation fund for very conservative savers and a few index-based funds. The annual fees on those investments are generally low, though the California program does charge a small administrative fee on top of fund expenses. Check the current fee schedule at calsavers.com, as it can change.
Contribution limits follow IRS Roth IRA rules, not 401(k) limits, so they're considerably lower. For 2026, the IRS sets the Roth IRA contribution limit and adjusts it periodically for inflation. Income limits also apply to Roth IRA eligibility, so if you earn above the IRS phase-out threshold, you may not be able to contribute a full amount. Verify the current limits with the IRS at irs.gov or at calsavers.com before making decisions based on specific figures.
CalSavers vs. a 401(k): The Real Differences
The most significant practical difference is the contribution ceiling. A 401(k) allows workers to save far more per year than a Roth IRA, and an employer may match some portion of what you put in. CalSavers has no employer match requirement, and the contribution limit is much lower.
If your employer offers a 401(k) and you're also enrolled in CalSavers for some reason, you'll want to sort that out, because your CalSavers contributions count against your Roth IRA limit across all accounts. You can't double your Roth IRA space by having two accounts.
That said, CalSavers has real advantages over doing nothing. The automatic enrollment feature gets people saving who otherwise wouldn't start. There's no minimum to open an account, you own it regardless of where you work, and you can take it with you if you change jobs. For someone without access to any employer plan, it's a meaningful option rather than a consolation prize.
See also: CalSavers Explained: What California Workers Without a Retirement Plan Need to Know · CalSavers vs. a 401(k): What California Workers Without an Employer Plan Should Know
What To Do If You're Already Enrolled
If you've been auto-enrolled, your first step is to log into calsavers.com and confirm your contribution rate, investment selection, and beneficiary. The default investment is fine for many people, but it's worth understanding where your money is going. If the default contribution rate is higher or lower than you want, change it. If you want to opt out entirely, you can, though the state notes that people who opt out are re-enrolled periodically unless they opt out again.
If you've opted out and you're not saving anywhere else, it's worth taking another look. California's cost of living means the stakes of under-saving for retirement are higher here than in most states, since retiring in California on Social Security alone is significantly harder than doing so in lower-cost states.
If You're Self-Employed or Your Employer Isn't Registered Yet
Self-employed Californians can enroll in CalSavers directly as voluntary participants. That said, self-employed people also have access to other options with much higher contribution limits, like a SEP-IRA or a solo 401(k), which a financial professional or tax adviser can help you compare. CalSavers is a reasonable starting point, but it's not always the best tool for someone with self-employment income.
If you believe your employer is required to register but hasn't, the California Franchise Tax Board is authorized to assess penalties on non-compliant employers. You can find information about employer obligations and compliance at calsavers.com.
This is general information, not financial or tax advice. Contribution limits, fee schedules, and program rules can change. Verify current details directly with CalSavers at calsavers.com and with the IRS at irs.gov before making retirement savings decisions.