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)
| CalSavers | Fischer Investment Strategies 401(k) | |
|---|---|---|
| Contribution Types | Roth IRA | Pre-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 excluded | All Employees* *Employer can custom design the plan to include/exclude certain classes |
| Employer Contributions | None Allowed | Allowed, Not Required |
| Investment Flexibility | None - Limited to the State Street Target Retirement Fund Series and 5 investment options selected by CalSavers Investment Committee | Yes - 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 Design | Inflexible | Flexible - Eligibility, automatic features, matching contributions, and loans among others |
| Employer Costs | None | Flexible - Administrative costs can be passed to participants or paid by the company |
| Employee Costs | Investment and Administrative Costs | Flexible - Investments and Administrative Costs |
| Employee Tax Benefits | None | Matching Contributions (Optional) are Tax Deductible |
| Employer Costs | None | Flexible - Administrative costs can be passed to participants or paid by the company |
| Employee Costs | Investment and Administrative Costs | Flexible - Investments and Administrative Costs |
| Employee Tax Benefits | None | Matching 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.
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.
