CalSavers Explained: What California Workers Without a Retirement Plan Need to Know
Roughly half of California's private-sector workforce has no access to a 401k or pension through their job. CalSavers, the state's mandatory retirement savings program, was built specifically for that gap. If your employer doesn't offer a retirement plan and you haven't set anything up independently, here's how the program actually works and what choices you have.
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What CalSavers Is
CalSavers is a Roth IRA administered by the CalSavers Retirement Savings Board, a California state agency. It works like any other Roth IRA: contributions come from your paycheck after taxes, the money grows tax-free, and qualified withdrawals in retirement are tax-free as well. The account is yours, not your employer's, so it follows you if you change jobs.
It is not a pension. There is no employer match built into the program. What it offers is a low-friction way to save through automatic payroll deductions without having to open a brokerage account on your own or figure out which fund to pick first.
By law, California employers with five or more employees who don't offer their own qualifying retirement plan are required to register with CalSavers and facilitate payroll deductions for their workers. The enrollment deadlines for employers of various sizes have all passed as of 2026. Employers who remain out of compliance are subject to state penalties. If you believe your employer should be registered and isn't, CalSavers has an enforcement process.
How Enrollment and Contributions Work
Workers at registered employers are automatically enrolled at a default contribution rate of 5% of gross pay. That rate automatically increases by 1 percentage point each year up to a cap of 8%, unless you set a different rate. You can change your contribution amount, pause contributions, or opt out entirely at any time through your CalSavers online account. There's no penalty for opting out, and you can re-enroll later.
Because CalSavers accounts are Roth IRAs, standard IRS annual contribution limits apply. The IRS typically adjusts those limits for inflation each year, so check irs.gov for the current cap. As of 2025, the standard limit was $7,000, with a catch-up amount available for savers 50 and older. If you're also contributing to a Roth IRA you opened elsewhere, all contributions across all Roth IRAs count toward the same annual limit.
Roth IRA income eligibility rules also apply. If your income exceeds the IRS phase-out thresholds for Roth IRA participation, CalSavers' traditional IRA option may be worth considering instead. Check irs.gov for current income limits, as they change with inflation adjustments.
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Investment Options and Fees
CalSavers offers a limited menu of funds, including a capital preservation option and index funds across different risk profiles. New enrollees are placed by default in a target-date fund aligned with their expected retirement year, which automatically shifts toward more conservative investments over time. You can change your fund allocation through your account.
The program charges an annual fee expressed as a percentage of your account balance. It's typically lower than actively managed funds but higher than what you'd pay for a comparable index fund at a low-cost brokerage like Fidelity or Vanguard if you opened an IRA there yourself. For someone who wouldn't otherwise open a retirement account on their own, the convenience may outweigh that cost difference. For someone comfortable managing an account independently, a self-directed Roth IRA at a brokerage could offer lower fees and a wider investment selection. Check calsavers.com for the current fee schedule, which can change.
Who Else Can Participate
CalSavers isn't limited to employees at covered businesses.