Saving for Retirement

Buy time by saving for retirement.

Retirement savings give you freedom and stability when you're no longer working, so you don’t have to rely solely on Social Security or others to meet your basic needs. Starting early means your money has more time to grow.

The biggest ally you have when it comes to your retirement is time. The earlier you start investing in your retirement, the greater the benefit will be when you go to retire.

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Common Retirement Accounts

Work-Based Accounts

What they do:

These are accounts you often access through your job. Your employer might offer them, and sometimes they’ll even contribute money on your behalf. These accounts let you save automatically from your paycheck, and many employers offer matching contributions — free money if you participate.

Examples:

• ‍401(k) - Common with private employers. You put in pre-tax dollars, it grows tax-deferred, and you pay taxes when you withdraw.‍
• 403(b) - Similar to a 401(k), but for public schools, nonprofits, and government workers.‍
• 457(b) - Offered to some government and nonprofit workers. More flexible withdrawal rules.

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CalSAVERS and Other State Plans

What they do:

‍If your job doesn’t offer a retirement plan, some states (like California) provide automatic retirement savings programs. These plans are easy to start and move with you if you change jobs.

Example:

• ‍CalSavers - You contribute through payroll deductions, and the money goes into a Roth IRA under your name.

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Individual Retirement Accounts (IRAs)

What they do:

You open these on your own — not through your job. They’re a good option if you don’t have a workplace plan or want to save more. IRAs give you control over your savings and investment choices, and Roths are especially helpful if you expect to be in a higher tax bracket later.

Example:

• ‍Roth IRA - You contribute after-tax dollars, but withdrawals in retirement are tax-free — including your earnings.

‍Remember: Just because your employer doesn’t offer a savings account doesn’t mean you can’t start saving for retirement TODAY!

The CalSAVERS Program combined with California’s minimum wage law can help boost young, low-income workers' retirement income by 50%.

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