As a nanny working in California, you may have thought retirement savings were out of reach — especially if your employer doesn’t offer a 401(k) or IRA. Thanks to CalSavers, that’s changing. This state-sponsored program gives you a simple, accessible way to save for your future.
Below, we’ll walk through the benefits of CalSavers, how it works for nannies, what you need to do to enroll, and why some nannies may choose to opt out. If you want more info, Homework Solutions has a great blog too!
Why CalSavers Is a Win for Nannies
Access to Retirement Savings: Even if your household employer doesn’t offer a retirement plan, CalSavers ensures you still have a way to save for your future.
Automatic Contributions: Deductions come straight from your paycheck — no extra steps or paperwork.
You’re in Control: Your CalSavers account is yours, not your employer’s. You can adjust contributions, change investments, or pause savings anytime.
Set It and Forget It: The program can automatically increase your savings rate up to 8% over time.
Portable and Flexible: If you change families or take a break from work, your account moves with you.
How CalSavers Works for Nannies
When your employer enrolls in CalSavers, they upload your information to the program. You’ll then have 30 days to:
Set up your account
Choose your contribution rate
Or opt out, if you prefer
If you take no action, you’ll be automatically enrolled at the default 5% contribution rate. From there, deductions begin through payroll, and you can adjust your rate or opt out at any time.
You must be 18 or older and classified as an employee under California law to participate. There’s no minimum hour requirement, so even part-time nannies qualify once their employer is registered.
Important Things to Keep in Mind
CalSavers contributions count toward your annual IRA limit.
Withdrawals made too early may result in taxes or penalties.
Small administrative and withdrawal fees may apply (some are waived for low balances).
By default, CalSavers is a Roth IRA, so your money grows tax-free and qualified withdrawals in retirement are tax-free.
If your employer already offers a 401(k) or IRA, they’re not required to enroll in CalSavers.
Why Some Nannies Choose to Opt Out of CalSavers
While CalSavers is an excellent option for many nannies, participation isn’t mandatory. You can opt out if it doesn’t align with your financial goals.
Common Reasons to Opt Out
1. Already Have a Retirement Account
If you already contribute to your own IRA or employer plan, you may not need another account.
2. Prefer a Different Investment Option
Some nannies prefer to invest through a financial advisor or use funds not offered by CalSavers.
3. Need Full Access to Income
If you’re focused on short-term goals like paying off debt, saving for a car, or managing expenses, opting out temporarily can help you keep more take-home pay.
4. Tax Preference
CalSavers defaults to a Roth IRA (after-tax contributions). If you’d rather defer taxes until retirement, you might choose a Traditional IRA outside the program.
Criteria and How to Opt Out
Opting out is completely voluntary — and you can change your mind anytime.
To opt out, you must:
Be at least 18 years old and listed as an employee by your household employer.
Receive your CalSavers enrollment notice by email or mail.
Opt out within 30 days of being added — or anytime later — using one of these methods:
Log in to your account at saver.calsavers.com
Call (855) 650-6918 and use the automated system
Mail a completed opt-out form to CalSavers
If you decide to rejoin, you can opt back in at any time — your account is yours for life, even if you change jobs or take time off.
Conclusion
If you’re a nanny in California, CalSavers is a smart and flexible way to start building retirement savings — even if your employer doesn’t offer a plan. With automatic contributions, full account control, and the ability to opt out, it gives nannies financial independence and peace of mind.
Encourage your employer to enroll, and take advantage of this easy opportunity to invest in your future — on your terms.
