Connecticut employers: Explore a SIMPLE IRA as an alternative to MyCTSavings
Connecticut employers with five or more employees must either register for MyCTSavings or offer a qualified retirement plan. If you want employer contributions and a choice of investment portfolios, a WealthRabbit SIMPLE IRA may be worth a look. Employers who offer a qualified plan certify their exemption with the state.
What is MyCTSavings?
MyCTSavings is Connecticut’s state-run retirement program for private-sector employers that don’t offer a qualified plan. Employers with five or more Connecticut employees, paid within the last 12 months, must register or certify an exemption. Employees become eligible at age 19 after 120 days of employment and are enrolled in a Roth IRA at a default 5% of gross pay unless they opt out. Employers aren’t required to contribute or collect program fees.
Registration deadlines (the original phase-in dates have passed)
- 100 or more employees: June 30, 2022
- 26 to 99 employees: October 31, 2022
- 5 to 25 employees: March 15, 2023
- Newly eligible employers: August 31 each year
Penalties for not complying
Since July 1, 2025, employers receive three notices of non-compliance. If you remain non-compliant 90 or more days after the final notice, annual penalties may apply, based on employer size:
- 5 to 24 employees: up to $500 per year
- 25 to 99 employees: up to $1,000 per year
- 100 or more employees: up to $1,500 per year
Where MyCTSavings may not be the right fit
MyCTSavings is built to be simple, and for many small businesses that is exactly what they need. Here is what to weigh before you decide.
What it does well: no employer fees, no required employer contribution, and minimal administrative work.
What it does not do:
- No employer matchYou cannot add a match or profit share, so the plan cannot help you recruit or keep people.
- Roth IRA onlyEmployee savings are limited to Roth IRA contributions, up to $7,500 in 2026 ($8,600 if age 50 or older), subject to Roth income limits.
- A set contribution designContribution rates and investment options are set by the state program.
- A curated fund menuEmployees choose from state-selected investments rather than a broader portfolio menu.
- No plan to claim credits onBecause you are not sponsoring a plan, there are no startup costs to offset and no employer contributions to deduct.
A SIMPLE IRA: an alternative to consider
A SIMPLE IRA is an employer-sponsored plan for businesses with 100 or fewer employees. You decide how your team’s retirement benefit works, and your employees can save more each year than they could in a MyCTSavings Roth IRA.
- Possible tax creditsEligible employers may claim a federal credit for plan startup costs for up to three years, plus a credit of up to $1,000 per employee for employer contributions in a plan’s early years. The amount depends on your size and your actual eligible costs.1
- Employer contributions that may be deductibleContributions you make are generally deductible as a business expense.
- Higher contribution limitsIn 2026, employees can defer up to $17,000 into a SIMPLE IRA, plus $4,000 more if they are 50 or older ($5,250 if 60 to 63).2
- A choice of investment portfoliosEmployees pick from WealthRabbit’s investment portfolios instead of a single state-selected menu. Investing involves risk, including loss of principal.
- A benefit people noticeAn employer contribution can help you recruit and keep good people.
Know before you choose:
A SIMPLE IRA is available to employers with 100 or fewer employees who earned $5,000 or more in the prior year. It must be the only retirement plan you offer that year. Employer contributions are required every year: either a match of up to 3% of pay, or 2% of pay for every eligible employee. A new SIMPLE IRA generally must start between January 1 and October 1; plans set up after October 1 generally begin the following January 1 (new businesses excepted). Withdrawals before age 59½ may be subject to a 10% additional tax, or 25% within the first two years of participation. Employers remain responsible for timely deposits and required notices.
See How Much You Can Save with a SIMPLE IRA
Small businesses can take advantage of tax credits to help cover setup and administrative costs. By launching a new plan with auto-enrollment, you could qualify for up to $5,500 in tax credits!
How tax credits work
Tax credits are designed to offset the cost of setting up and administering, as well as contributing to the employees retirement savings.
Employers can claim up to $5,000 per year for three years to offset plan setup and administrative costs. They may qualify for additional tax credits.
- Auto-enrollment bonusIf you make the plan automatic (employees are enrolled unless they opt out), you get an extra $500 credit for 3 years.
- Employer contributionsYou may also get credits for money you put into employees' accounts (up to $1,000 per employee in the early years).
Together, these credits can add up to thousands in savings for your business. Curious how much you could claim?
Try our calculator and see exactly how much you could save.
Estimate your tax credit
Disclosure*
The SIMPLE IRA tax credit calculator is intended to estimate the average tax credit for your business. Please note, it does not constitute tax or legal advice.
Set up a retirement plan your team will use
Hypothetical illustration for demonstration only. It is not an actual account and does not guarantee future results.
Instead of enrolling in MyCTSavings, Connecticut employers can offer a qualified plan such as a WealthRabbit SIMPLE IRA. Employers that offer a qualified plan are exempt from enrollment but must certify their exemption through the MyCTSavings portal.
- Self-onboardingYou and your employees sign up online, and plan documents are e-signed in the app. Setup takes a few steps.
- Payroll integrationWealthRabbit connects with supported payroll systems to help you send contributions accurately and on time. You remain responsible for remitting contributions by the required deadlines.
- Plan rolloversMove funds from an existing retirement plan into WealthRabbit. Timing depends on your current provider. SIMPLE IRA rules apply: funds from non-SIMPLE plans can generally be rolled in only after two years of participation in the SIMPLE IRA.
- Automated contributionsSet up automatic deposits so contributions go out on schedule. You can review and change them at any time.
- Employer and employee portalsManage contributions and investments from your computer or phone, and see contributions, investment performance and account activity in one place.
MyCTSavings vs. WealthRabbit SIMPLE IRA
A quick look at how the two options compare.
| Feature | MyCTSavings | WealthRabbit SIMPLE IRA |
|---|---|---|
| Employer setup | State-run program. You register, provide employee information and send payroll contributions | Set up online with payroll sync. You manage contributions, notices and annual plan decisions |
| Account type | Roth IRA, default 5% contribution, no employer match | SIMPLE IRA with employer contributions |
| Who can use it | Connecticut employers with 5+ employees that have not offered a qualified plan in the past 2 years. Employees must be 19+ and employed 120+ days | Employers with 100 or fewer employees who earned $5,000+ in the prior year. Must be your only plan |
| Employer contributions | Not required | Required: match up to 3% of pay, or 2% of pay for every eligible employee |
| 2026 employee limit | $7,500 ($8,600 if 50 or older) | $17,000, plus $4,000 if 50 or older ($5,250 if 60 to 63) |
| Fees | No employer fees. Participants pay program fees3 | $29 per month plus $4 per employee per month, paid by the employer. Employee account fees also apply3 |
| Investment menu | State-selected investments | WealthRabbit investment portfolios |
| Employee experience | State-run account and portal | WealthRabbit employer and employee portals and mobile app |
3 MyCTSavings charges employers no fees. Participants pay the program’s fees. WealthRabbit SIMPLE IRA plan fees are paid by the employer: $29.00 per month plus $4.00 per employee per month. Employee accounts are also charged an annual fee of $10 plus an asset-based advisory fee of 0.20% to 0.50% (tiered). Additional fees and investment-related costs may apply. See our Fees and Services Disclosure and Form ADV Part 2A.
4 Information about MyCTSavings is based on public information from the program and Connecticut law as of October 21, 2026, and may change. WealthRabbit is not affiliated with, sponsored by, or endorsed by MyCTSavings, the Connecticut Retirement Security Authority or the State of Connecticut.
Frequently asked questions
Private-sector employers in Connecticut must register or certify an exemption if they meet all of these criteria:
- They have five or more employees in Connecticut
- They have paid those employees within the last 12 months
- They have not offered a qualified retirement plan in the preceding two years
Eligible employees must be at least 19 years old and employed for at least 120 days. Employers that already offer a qualified plan (such as a SIMPLE IRA) must still certify their exemption through the MyCTSavings portal.
The mandate was phased in by employer size in 2022 and 2023. Those deadlines have passed. Employers that become newly eligible must register by August 31 of each year.
Employers register with the program, provide employee information, and send payroll deductions to the state program. Employers are not required to contribute to employee accounts. Employers that offer a qualified plan certify their exemption instead.
Employers receive three notices of non-compliance. If they remain non-compliant 90 or more days after the final notice, annual penalties of up to $500 (5 to 24 employees), $1,000 (25 to 99 employees) or $1,500 (100 or more employees) may apply.
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