Updated August 7, 2026. Quick answer: if your state runs an auto-IRA programme and your employer has no retirement plan, you are enrolled automatically — into a Roth IRA, at a default contribution rate, unless you opt out. A Roth IRA has income limits that a workplace plan does not, and the programme does not check whether you are under them. You do. CalSavers says so in its own words. For most participants this is a non-issue; the two people it can catch are a high earner and, much more sharply, anyone married filing separately, whose Roth phase-out starts at zero.
What these programmes actually do
A state auto-IRA programme requires employers above a certain size that offer no retirement plan to enrol their workers into a state-facilitated IRA. Enrolment is the default and opting out is an action you have to take. Two programmes we could verify first-hand:
- California (CalSavers). “A portion of your pay is automatically contributed to an Individual Retirement Account that belongs to you”, and the accounts are Roth (post-tax) IRAs. Default rate 5% of gross income, with “an automatic increase feature that will increase your savings rate by 1% each year until your savings rate reaches 8%, unless you choose otherwise.”
- Illinois (My Illinois Savings). The Illinois State Treasurer states: “Workers who participate in My Illinois Savings are automatically enrolled in a default target-date Roth IRA with a default 5% payroll contribution.”
CalSavers does offer a traditional IRA — but only if you ask for it: “CalSavers offers savers the option to recharacterize their contributions to a Traditional IRA. You can complete this action online, use this form, or contact Client Services.” The Roth is what you get by doing nothing.
The income limit the default does not check
A Roth IRA has an income limit; a 401(k) does not. That difference is the whole of this page.
For 2026 the IRS puts the Roth phase-out ranges at “between $153,000 and $168,000 for singles and heads of household… For married couples filing jointly, the income phase-out range is increased to between $242,000 and $252,000… The phase-out range for a married individual filing a separate return… remains between $0 and $10,000.”
Read that last one again. A married person filing separately is phased out between zero and ten thousand dollars of income. Someone in that filing status who is auto-enrolled at 5% of pay is almost certainly contributing to a Roth they are not eligible to fund — and nothing in the enrolment process will tell them. That is the sharp edge here, and it is far more likely to bite than the high-earner case everyone talks about.
The consequence if it happens: the IRS states that “Excess contributions are taxed at 6% per year for each year the excess amounts remain in the IRA”, and that avoiding it means withdrawing “the excess contributions from your IRA by the due date of your individual income tax return (including extensions); and any income earned on the excess contribution.” It is 6% a year for as long as it sits there, not a one-off.
Who is responsible for checking — and what we will not claim
CalSavers is explicit that it is you. Its FAQ: “Eligibility to participate in a Roth IRA is limited to certain annual income levels. To determine if you are eligible to contribute to a Roth IRA, please visit the IRS website.” And on its programme-details page: “those with higher incomes may not be eligible to contribute. If you earn more than the Roth IRA income limits set by the federal government, you may need to opt out.”
So we are not going to tell you these programmes hide this, because the one we could check does not hide it. That framing is common and, on the evidence we could actually gather, wrong. The real problem is structural rather than deceptive: a disclosure on a website is a weak instrument against a system whose entire design is that you do nothing and money moves. Auto-enrolment works precisely because people do not read the page.
What we could not check, stated plainly. We could not read OregonSaves at all — seven distinct programme URLs returned HTTP 403 or 401 to us — so we make no claim about Oregon’s default account type or its disclosures. For Illinois, the Treasurer’s page we could read does not mention the income limit, but the programme’s own FAQ was unreachable, so we are not saying Illinois fails to warn savers. Absence from the one page we could open is not evidence of absence.
What to actually do
- If your income is comfortably below the phase-out and you file jointly or singly, do nothing. Auto-enrolment is working as intended and a Roth IRA is a good place for the money.
- If you are married filing separately, check before the first contribution, not at tax time. This is the case most likely to produce an excess contribution.
- If you are near the phase-out, watch the year you cross it — a bonus, a second job or a spouse’s raise can move you over without any change to the payroll deduction.
- If you have already over-contributed, the correction has a deadline: your return due date including extensions, and the earnings have to come out too. This is worth an hour with a preparer rather than a guess.
- Check whether a traditional IRA suits you better — where the programme offers the switch, it is an opt-in action, and a traditional IRA has no income limit on contributions.
If you are self-employed rather than employed, none of this applies and the options are much better: what self-employment income unlocks, and solo 401(k) versus SEP-IRA.
How many states have one
We could not find an official multi-state tally, and we are not going to assemble one ourselves and present it as authoritative. The most-cited count comes from Georgetown University’s Center for Retirement Initiatives, which as of 1 June 2026 lists 15 auto-IRA programmes fully open (CA, CO, CT, DE, IL, ME, MD, MN, NJ, NV, NY, OR, RI, VT, VA) plus two other state programme types. That is a university research centre, not a government source, and we are labelling it as such rather than laundering it into a fact. Check your own state’s treasurer or programme site — the count moves, and the launch dates matter more than the count.
Sources and limits
Read 2026-08-07. CalSavers from its own programme details and FAQ; Illinois from the Illinois State Treasurer; Roth phase-outs and the excess-contribution rule from the IRS (2026 limits, IRA contribution limits); the programme count from Georgetown CRI, labelled non-official above.
Three limits, because they change what this page can be relied on for. (1) OregonSaves is entirely unverified here — every URL we tried was blocked to us. (2) We verified default-Roth enrolment for two programmes, not for all of them, and we do not assume the rest match. (3) The IRS phase-out figures are 2026 and are inflation-adjusted annually, so check the year on any figure you see quoted, including ours. General information, not tax advice.
How this page is kept current
What moves it: Programme launches and legislative enactments, which arrive on rolling dates rather than an annual cycle.
What we do not promise. There is no automated watcher behind this page. What exists is a dated register of changes we already know are coming, checked at every batch close rather than waited on, plus a re-read whenever we touch the page for another reason. We would rather describe that plainly than claim a monitoring cadence we do not run — a tracker that overstates its own maintenance is the thing this page class exists to avoid.
Cite this
Clear Money Guide, State Auto-IRA Programs 2026. https://clearmoneyguide.com/state-auto-ira-programs/. Each row states the statute or agency source behind it and the date it was read.
Free to reuse with attribution under CC BY 4.0. No advertising appears on this page.