California’s retirement mandate has been in place for a while now. If you have 5 or more employees, you’re legally required to offer a retirement plan. Many businesses signed up for CalSavers simply to stay compliant—and that worked as a short-term solution.
But here’s the challenge: CalSavers is the starting line, not the finish line. If you’re still relying on it today, you may be missing opportunities for your business and your employees.
Why CalSavers Falls Short
CalSavers is designed to be simple and low-cost. But simplicity comes with trade-offs:
- No employer matching or profit-sharing
- Contribution limits that are far lower than 401(k)s and other plans
- Limited investment options for employees
- No tax benefits for your business
In short, CalSavers meets compliance requirements but doesn’t provide the long-term financial security—or the business incentives—that more robust retirement plans do.
A Better Path for Your Employees (and You)
Employees today are looking for employers who invest in their future. Offering only CalSavers may not be enough to attract and retain talent in a competitive market. By upgrading to a stronger plan, you can:
- Stand out as an employer of choice
- Maximize savings opportunities for yourself as the owner
- Give employees more choice and flexibility
- Take advantage of meaningful tax benefits
Your Alternatives to CalSavers
The good news: you have options that not only meet California’s requirements but also deliver real value.
| Plan Type | Best For | Employer Contribution | Tax Benefits | Complexity |
| SEP IRA | Small businesses, owner-only | Yes (employer only) | Deductible contributions | Low |
| SIMPLE IRA | Teams under 100 employees | Yes (mandatory match/2%) | Yes | Medium |
| 401(k) | Growing businesses needing flexibility | Yes (match/profit-sharing optional) | Significant | Higher |
| Payroll Deduction IRA | Budget-conscious businesses | No | No employer deduction | Very Low |
The Bottom Line
CalSavers was a good way to get started, but it shouldn’t be your long-term retirement strategy. Your employees deserve a plan that supports their financial future—and you deserve one that supports your business growth.
Now is the time to explore better options. By making the switch, you can strengthen your role as an employer, unlock valuable tax benefits, and give your team the retirement security CalSavers simply can’t provide.
