CalSavers: A Secure Choice for California’s Future Retirees
By: State Treasurer John Chiang
AARP and I have combined efforts to introduce CalSavers — a new retirement savings program aimed at providing greater financial security for millions of Californians, who could otherwise be careening toward an impoverished retirement.
Without spending a dime, nickel, or penny of taxpayer monies, CalSavers will put millions of Californians on the path toward a more dignified retirement. This is a bold and fiscally-responsible solution to a growing humanitarian catastrophe that is cornering more and more seniors into choosing between buying vital medications or paying their rent. Nearly half of California workers are on a trajectory to retire into economic hardship, defined as below twice the federal poverty rate. Just as dire, too many seniors may never be able to retire and will have no choice but to work until the grave.
CalSavers will benefit employees and employers alike. Opening up CalSavers will help employers who are unable to provide retirement programs due to administrative complexity, fees, or a fiduciary liability retain their valuable employees. Keeping employers and employees happy helps keeps California’s economy strong.
CalSavers is a state-backed program that will offer employees access to a completely voluntary, low-cost, portable retirement savings vehicle, featuring professionally managed investments and oversight provided by a public, transparent board of directors that I chair.
The program specifically aims to help 7.5 million hard-working private-sector workers gain access to a retirement savings vehicle through the places where they work. CalSavers will be the first program of its kind in California.
CalSavers begins its pilot run this fall, and opens fully statewide in mid-2019. Employers with 100 or more employees, which do not already offer a retirement program, will have one year from the full program launch date to register, where employers with 50 or more employees and those with 5 or more employees will have two and three years, respectively. Additionally, employers of any size can register at any time, as can individuals that want to invest in their retirement security.
Throughout August 2018, CalSavers and AARP released four fully-captioned videos showcasing why CalSavers is so vital to Californians.
Access to workplace retirement programs makes individuals 15 times more likely to save for retirement. A typical 25-year-old California worker who participates in CalSavers, at the default account settings, would be expected to save and earn as much as $350, 000 by the time he or she retires. Both millennials and baby boomers will benefit from this historic savings program. Help is needed, and CalSavers offers that help so Californians can invest in their futures.
The following article is based on remarks delivered by California State Treasurer John Chiang. To learn more about CalSavers click here .