California Retirement Mandate 2022

California Retirement Mandate 2022

California State Mandated Retirement Plans

State and federal governments are shifting the responsibility of retirement saving onto business owners by requiring employers with at least five or more employees to offer retirement plans for their employees by June 30, 2022, or face fines. Business owners have some options available to them like 401k plans or CalSavers.

CalSavers vs. Private 401(k)

CalSaversFischer Investment Strategies 401(k)
Contribution TypesRoth IRAPre-tax and Roth 401(k)
Annual Contribution Limits$6,000 in 2021 ($7,000 if age 50 or over)$20,500 in 2021 ($27,000 if age 50 or over)
Income Restrictions?Employees are unable to participate if:

Single with Modified Adjusted Gross Income (MAGI) over $135,000

Married Filing Jointly with MAGI over $199,000
No income Restrictions on employee contributions
Who Can Contribute?Limited - High Earners above the income restrictions are excludedAll Employees*

*Employer can custom design the plan to include/exclude certain classes
Employer ContributionsNone AllowedAllowed, Not Required
Investment FlexibilityNone - Limited to the State Street Target Retirement Fund Series and 5 investment options selected by CalSavers Investment CommitteeYes - Employers can decide which investment options and target date-series they would like to offer employees, or can utilize a 3(38) Fiduciary option whereby investment options are selected and monitored by RPC's Investment Committee
Plan DesignInflexibleFlexible - Eligibility, automatic features, matching contributions, and loans among others
Employer CostsNoneFlexible - Administrative costs can be passed to participants or paid by the company
Employee CostsInvestment and Administrative CostsFlexible - Investments and Administrative Costs
Employee Tax BenefitsNoneMatching Contributions (Optional) are Tax Deductible
Employer CostsNoneFlexible - Administrative costs can be passed to participants or paid by the company
Employee CostsInvestment and Administrative CostsFlexible - Investments and Administrative Costs
Employee Tax BenefitsNoneMatching Contributions (Optional) are Tax Deductible

Schedule an appointment if you would like to discuss your options with an advisor, or visit our Financial Plan Services site for more information.

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This commentary reflects the personal opinions, viewpoints and analyses of the Fischer Investment Strategies, LLC employees providing such comments, and should not be regarded as a description of advisory services provided by Fischer Investment Strategies, LLC or performance returns of any Fischer Investment Strategies, LLC client. The views reflected in the commentary are subject to change at any time without notice. Nothing in this commentary constitutes investment advice, performance data or any recommendation that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. Fischer Investment Strategies, LLC manages its clients’ accounts using a variety of investment techniques and strategies, which are not necessarily discussed in the commentary. Investments in securities involve the risk of loss. Past performance is no guarantee of future results.

Financial Advisor at Fischer Investment Strategies | Website

Ted Fischer is a Fee-Only Certified Financial Planner® & fiduciary, and the founder of Fischer Investment Strategies.

Drawing from more than 25 years of experience in the financial services industry, Ted's expertise includes retirement planning, investment analysis, tax planning, estate planning, and insurance.

Ted has an extensive academic background. He received his Certified Financial Planning (CFP®) designation from UCLA in 2011. He became a Qualified Plan Financial Consultant (QPFC®) and an Accredited Investment Fiduciary (AIF®). Ted has a Bachelor of Science in Marketing, with a minor in Finance, from San Diego State University.

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