CalSavers or a 401(k) Plan: What’s best for your business?
Setting up a good retirement plan is time well spent. It helps to attract top talent and retain loyal employees. For your employees, a good plan makes it easy to save, has high-quality and low-cost investment funds, and offers access to advice. For you, a good plan is easy to administer, can be customized for your business, and comes with tax advantages.
CalSavers is a state (CA) run retirement plan. The plan has been mandated for use by business owners who otherwise do not offer a retirement plan benefit program for their employees, such as a 401(k), SIMPLE IRA or SIMPLE 401(k). Employers with five or more employees who do not provide a retirement plan for their workers must register for CalSavers and facilitate employee contributions to individual retirement accounts.
Advantages for business Owners | CalSavers | 401(k) Plan |
Business Owners are eligible for a tax credit | NO | YES |
Automated payroll integration | NO | YES |
Customizable for your business | NO | YES |
Option to match employee contributions | NO | YES |
Business owners/plan advisors can choose investment options | NO | YES |
The CalSavers deadline is June 30, 2021 if you have 50 or more employees in California. However, you do not have to register for the CalSavers program if you establish your own employee retirement plan, such as a 401(k) plan.
There are several types of plans that may be a better option for both you and your employees. We can help you avoid noncompliance with that State of California by helping you establish a good great retirement plan. We help make retirement plans simple!
Cappuccino Financial Retirement Solutions is a retirement plan services firm assisting small to mid-sized businesses manage the complex challenges posed by employer-sponsored retirement plans. Contact us at your earliest convenience for a complimentary consultation to see how we can help you get started!
This content is developed from sources believed to be providing accurate information. It may not be used for the purpose of avoiding any federal tax penalties. The opinions expressed and material provided are for general information and should not be considered a solicitation for the purchase or sale of any security. This information is not intended as authoritative guidance or tax or legal advice. You should consult your attorney or tax advisor for guidance on your specific situation. In no way does advisor assure that, by using the information provided, plan sponsor will be in compliance with ERISA regulations. For Plan Sponsor Use Only -not for use with participants or the public.