Illinois employers: there's a better retirement solution than Illinois Secure Choice
Offering a retirement plan is required in Illinois — but you’re not limited to the state’s default program. Illinois Secure Choice has restrictions that may not fit your business or your team’s needs. WealthRabbit’s SIMPLE IRA give you the flexibility, control, and tax advantages to provide a retirement benefit your employees will truly appreciate.
What Illinois Secure Choice?
Illinois Secure Choice is the state-mandated retirement savings program for employers that don’t already offer a qualified plan. It applies to private-sector employers that have been in business for at least two years and have five or more employees in Illinois. Employees are eligible if they are at least 18 years old and receive a W-2 from an eligible employer. While the program ensures access to retirement savings, it offers limited flexibility and does not allow employer contributions.
Registration deadlines
The registration deadline depends on the size of your business.
- Employers with 500+ employees: November 1, 2018
- Employers with 100 to 499 employees: July 1, 2019
- Employers with 25 to 99 employees: November 1, 2019
- Employers with 16 to 24 employees: November 1, 2022
- Employers with 15 employees: November 1, 2023
Non-compliance penalties
Failure to comply with the state mandate may face financial penalties:
- $250 per eligible employee for the first calender year of non-compliance
- An additional $500 per eligible for each subsequent year of non-compliance
What you’re missing with Illinois Secure Choice
Illinois Secure Choice is designed to check a compliance box - but for businesses and employers, it often falls short:
- Limited investment optionsEmployees can't build customized retirement portfolios.
- No employer benefitsBusinesses spend time managing compliance, but don't receive tax incentives.
- Lower contribution limitsEmployees can save only up to $7,000 per year (or $8,000 if age 50+) under Roth IRA rules
- Minimal growth potentialLimited funds can mean lower returns for employees over time.
- Harsh penaltiesNon-compliant Illinois businesses face fines of up to $250 per employee for the first year, and $500 per employee for each subsequent year.
Ready for a retirement solution that works better for your business?
SIMPLE IRA: The smart alternative to Illinois Secure Choices
A SIMPLE IRA plan offers significant advantages over the state-mandated option, providing tax benefits for employers and greater growth potential for employees. It's a powerful tool for attracting and retaining talent.
- Tax credits Qualify for up to $5,500 in tax credits for starting a new plan.
- Employer tax deductions Contributions you make are tax-deductible as a business expense.
- Higher contribution limits Employees can contribute up to $16,500 (2025) or $20,000 if age 50+ in a SIMPLE IRA far more than Illinois Secure Choice’s Roth IRA limit of $7,000.
- Investment flexibilityEmployees get access to a wide range of investment options, not just a few target-date funds.
- Attract & retain talentOffering a superior retirement benefit makes your company more competitive.
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.
Elevate your retirement savings with WealthRabbit
Looking for an alternative to Illinois Secure Choice? With a WealthRabbit SIMPLE IRA, Illinois businesses can meet state requirements while offering employees a more modern retirement benefit.
- Self-onboardingEmployers and employees sign up on their own—retirement plans are up and running in just a few clicks.
- Seamless payroll integrationWealthRabbit seamlessly connects with your payroll system to ensure accurate and timely contributions for every employee.
- Streamlined plan rolloversEasily roll funds from your existing retirement plan into WealthRabbit— no hassle, no delays.
- Automated contributionsEnjoy a hands-off approach to retirement savings. Set up automatic deposits so your team never misses a contribution.
- Employee & employer portalsManage contributions and investments anytime, anywhere — with real-time access to performance and account activity.
Illinois Secure Choice vs. WealthRabbit
A quick look at how WealthRabbit’s SIMPLE IRA compares to Illinois’s state program.
| Feature | Illinois Secure Choice | WealthRabbit SIMPLE IRA |
|---|---|---|
| Administrative efforts | State-mandated with limited customization; minimal employer involvement | Streamlined process with automated setup and payroll integration |
| Retirement options | Roth IRA only; default 5% contribution with auto-escalation to 10% and no employer match | More diverse investment options, customizable based on business needs |
| Eligibility criteria | Participation is open to employers with ≤100 employees earning ≥$5,000. A required contribution is either a 3% dollar-for-dollar match or a 2% nonelective contribution | Customizable to your business needs |
| Flexibility | State-regulated with fixed contribution rates and minimal flexibility | Highly customizable plan with the ability to modify contribution rated and match options |
| Monthly fees | No employer fees; employee accounts are subject to state administrative fees | User-friendly portals+mobile access + stronger growth Low-cost setup: $29/month + $4 per employee, no state fees |
| Employee experience | Basic account with limited tools for employees | Comprehensive dashboard, financial literacy resources, and rollover support |
Frequently asked questions
Illinois Secure Choice is the state-mandated retirement savings program. It’s designed to help employees save through payroll deductions if their employer doesn’t offer a qualified retirement plan.
An employer is required to either register for the program or certify an exemption if they meet all of the following criteria:
- Have five or more employees in Illinois
- Have been in business for at least two years
- Do not already offer a qualified retirement plan (such as a 401(k) or SIMPLE IRA)
Employers that offer an eligible, qualified plan, such as a SIMPLE IRA through WealthRabbit, are exempt and must certify their exemption with the state.
The Illinois Secure Choice program launched in 2018 and completed its phased rollout for smaller employers in 2023. All eligible employers are now required to comply.
- Employers with 500+ employees: November 1, 2018
- Employers with 100 to 499 employees: July 1, 2019
- Employers with 25 to 99 employees: November 1, 2019
- Employers with 16 to 24 employees: November 1, 2022
- Employers with 5 to 15 employees: November 1, 2023
Newly eligible businesses, such as those reaching five employees, must register or certify an exemption within 12 months of eligibility.
If you have questions about your specific deadline, contact WealthRabbit support for assistance.
Employers who fail to comply may face the following penalties:
- $250 per eligible employee for the first calender year of non-compliance
- An additional $500 per eligible employee for each subsequent year of non-compliance
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