Here Are Three BCAs That Actually Help You Save for College, Retirement, and Disability Expenses

March 2019

https://www.treasurer.ca.gov/cpcfa/

Spread the word to family, friends and neighbors!

The California State Treasurer’s Office is home to three programs that can make a great difference in the financial well-being of most Californians. One program helps families save for college. Another helps private sector workers save for retirement. And a third enables people will disabilities to save money without worrying about running afoul of federal rules that cap disability income.

Want to know how you can participate? Read on!

CalSavers: Because your money is your future.

Are you prepared for retirement? If you’re worried about you or your family’s retirement outlook, you are not alone.

Half of working Californians are on track to face serious financial hardship in retirement. With little to nothing saved, millions of Californians and many more nationwide will face the choice of retiring into poverty or never retiring at all.

While there are many reasons people don’t save for retirement, those who do save tend to have one thing in common: access to a workplace retirement savings vehicle.

CalSavers is here to help provide working Californians with that access. By ensuring nearly all working Californians have access to a retirement savings vehicle at their job, CalSavers can help close the gap in retirement security.

Employers from all over the state have already joined the program – large employers, tiny mom and pop shops, and industries ranging from restaurants, to tech, to non-profits are already a part of the program. Beginning in mid-2019, all eligible employers can join and help their employees save.

Here’s how it works: Employers that don’t already sponsor a retirement plan will register for CalSavers and their employees will be automatically enrolled unless the worker chooses to opt out. Participating employees contribute to their CalSavers account through the ease of regular payroll contributions.

CalSavers is inspired by some of the leading minds in finance and human behavior. By harnessing the power of habit, CalSavers makes it easy to start saving. Because investing can be overwhelming, CalSavers uses a simple investment menu and standard savings options based on a saver’s age or retirement goal. While we all know how important it is to save more for retirement, the day-to-day grind can often get in the way of planning for the future. That’s why CalSavers offers automatic escalation, where savers can set automatic increases in how much they save.

Small steps can often lead to giant leaps forward. CalSavers will help millions of hardworking Californians take that first step towards achieving their retirement dreams.

Learn how you can be a part of this groundbreaking initiative by visiting CalSavers.com and follow @CalSavers on Twitter and Facebook.

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EVENT: San Gabriel Valley Small Business Seminar

Mark the Date!

WHEN
April 5, 2019, from 9:30 AM to 12:30 PM
(Check-in: 9 AM)

WHAT
State Treasurer Fiona Ma invites you to attend a FREE small business seminar to learn about free resources that help businesses grow.

WHO
CalSavers Retirement Savings Program for private sector workers, GoBiz, FTB, the Small Business Majority and CalCap.

WHERE
Rowland Unified Board Room
1830 Nogales St., Rowland Heights, CA 91748

RSVP
http://bit.ly/svgsbs2019 or call (916) 653-2995

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CalABLE: Helping Individuals with Disabilities Save and Keep More

Left: Among our first enrollees! Thanks Amelia!

Since December 2018, nearly 600 people have opened a California Achieving a Better Life Experience (CalABLE) account.

CalABLE allows any individual with a disability that occurred before age 26 to open a tax-advantaged savings and investment account. The program was specifically designed to empower people with disabilities to achieve financial independence. Whether you’re a working individual with a disability, or a parent wanting to put money away for the future of a child with a disability, CalABLE can help you plan for a successful financial future.

Among the many benefits to enrolling in CalABLE is that if an individual is receiving means-tested government benefits -- SSI or Medi-Cal, for instance – money deposited in a CalABLE account up to $15,000 per year (or more, if the person is employed) is not counted as a resource when determining eligibility for such benefits.

Prior to the passage of the federal ABLE Act, SSI recipients with more than $2,000 in liquid assets would find their benefits suspended. They were required to “spend down” until their assets fell below the $2,000 threshold. With CalABLE, an individual receiving benefits can save or invest up to a total of $100,000 without jeopardizing their benefits. What’s more, anyone can contribute directly to another person’s CalABLE account and that contribution is not treated as additional income as it relates to benefits programs.

CalABLE is also a great program for people with disabilities who may not currently receive benefits. Money deposited in a CalABLE account can be withdrawn at any time without taxes or penalties, provided the money is used for Qualified Disability Expenses (QDEs).

What is a QDE? The regulations are intentionally broad. A QDE is any expense that maintains or improves the health, independence, or quality of life of the individual with a disability. That could include everyday household and healthcare expenses, as well as transportation costs, legal expenses, assistive technology, and more.

CalABLE is fully accessible online at CalABLE.ca.gov or by calling the customer support center at (833)-CAL-ABLE. At the enrollment website, individuals can learn more about eligibility, enrollment, and can even access their account without ever needing to go into a bank. In the coming weeks and months, the CalABLE team will be holding information sessions throughout the state to spread the word about this great new program. Contact the CalABLE team today if you would like additional information.

ScholarShare 529 – California’s Official College Savings Plan

One of the greatest hurdles families face when contemplating whether to pursue a post-secondary education is the skyrocketing cost of attending college. Costs have grown at an alarming rate. Between 2007-08 and 2017-18, tuition and fees at the University of California, California State University, and California Community Colleges jumped by 77 percent, 88 percent, and 130 percent, respectively.

Nationally. student loan debt is now more than $1.5 trillion. Among the borrowers are 3.7 million Californians, each of whom upon graduation owed $22,785 on average.

Fortunately, ScholarShare 529 is available to help. Administered by the ScholarShare Investment Board chaired by State Treasurer Fiona Ma, ScholarShare 529 since its introduction in 1999 has grown to over 320,000 accounts and nearly $8.8 billion.

What makes ScholarShare 529 a great savings tool is that it offers families a diverse set of investment options, low fees, tax-deferred growth, and withdrawals that are free from state and federal taxes when used for qualifying higher education expenses, such as tuition and fees, books, certain room and board costs, and computer equipment. Plus, savings can be used at any eligible educational institution, including public and private four-year universities, community colleges, career technical schools, graduate programs nationwide, even many colleges abroad.

Getting started is easy. If you have $25, a social security number or federal tax identification number, and are 18 years of age or older, you can open a ScholarShare 529 account. Simply visit http://www.mgp.scholarshare.com/.

Now through December 31, 2019, ScholarShare 529 also is offering eligible families who open a new account a dollar-for-dollar match up to $200. An additional $25 match is possible by establishing a monthly automatic contribution of $25 or more.

Note: Each month we will be sharing information on one of our BCAs and explain how the programs behind the acronym are enhancing the lives of Californians all across the state -- and how you, your family, or your business can share in, and contribute to, California's prosperity