Navigating CalSavers and 401(k) Options: What California Small Businesses Need to Know
- angela91949
- Feb 26
- 2 min read
California's retirement landscape is evolving, and as a small business owner, staying informed is crucial. At Roseland Bookkeeping, we're here to guide you through the CalSavers mandate and explore better retirement solutions like ADP's 401(k) plans.
Understanding CalSavers and the Upcoming Deadline:
California introduced CalSavers to help workers save for retirement. The program mandates that employers offer a retirement plan or register with CalSavers. While previous deadlines for larger employers have passed, a significant change is coming:
Effective December 31, 2025, employers with 1 or more employees must comply.
This means even very small businesses need to prepare.
The Limitations of CalSavers:
While CalSavers is a state-run option, it has limitations. It's essentially an IRA program, which may not offer the same flexibility and benefits as a private 401(k) plan.
Why Consider an ADP 401(k) Plan?
Before automatically enrolling in CalSavers, explore the advantages of an ADP 401(k) plan:
Comprehensive Solution: ADP offers a fully bundled 401(k) plan that integrates seamlessly with your existing ADP payroll.
Greater Flexibility: 401(k) plans provide more investment options and features compared to CalSavers.
Significant Tax Benefits:
The SECURE 2.0 Act offers tax credits up to 100% of retirement admin costs for businesses with fewer than 50 employees for the first three years.
A tax credit that offsets company match up to $1,000 per employee.
Potential for up to $16,500 in tax credits over the first 3 years of having the plan.
Reduced Liability: ADP provides fiduciary protection, reducing your liability as a plan sponsor.
Streamlined Administration: ADP handles recordkeeping, compliance, and administration, saving you time and money.
Enhanced Investment Options: Access to a wide range of fund options with no-load fees and no wrap fees.
Employee Education: ADP provides education and financial wellness programs for your employees.
The Retirement Reality in California:
7.5 million private-sector workers in California lack access to a workplace retirement plan.
2/3 of working millennials have nothing saved for retirement.
The median retirement assets for working households ages 25-64 is just $3,000.
Each generation is projected to retire poorer than the last.
Offering a robust retirement plan is not just a benefit; it's a necessity.
How Roseland Bookkeeping Can Help:
We can help you navigate the complexities of CalSavers and 401(k) plans. We will work with you and ADP to set up the best plan for your business, and help you take advantage of the tax incentives.
Don't wait until the 2025 deadline. Contact Roseland Bookkeeping today to explore your retirement plan options and secure your employees' financial future.
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