CalSTRS Retirement Guide for Teachers: Complete California Educator Pension Planning
Everything California teachers need to know about CalSTRS retirement. Plan your educator pension, understand your benefits, and secure your future.
Key Takeaways
- 1CalSTRS is the nation's largest educator-only pension fund
- 2Most California teachers do not receive Social Security from teaching
- 3The Defined Benefit formula provides 2% at age 62 for career teachers
- 4CalSTRS-Medicare is separate from your pension and requires enrollment
- 5Supplementing your pension with 403(b) or 457 plans is essential for most educators
Understanding CalSTRS
The California State Teachers' Retirement System (CalSTRS) serves nearly 1 million California educators, providing retirement security for K-12 teachers, community college instructors, and other public school employees.
- Over $300 billion in assets under management
- Second-largest pension fund in the United States
- Covers K-12 teachers, community college faculty, and school administrators
- Provides three benefit programs: Defined Benefit, Defined Benefit Supplement, and Cash Balance
- CalSTRS-administered employers do not participate in Social Security
The CalSTRS Defined Benefit Program
The Defined Benefit (DB) Program is CalSTRS's traditional pension plan. Your pension is calculated using a formula based on your service credit, age factor, and final compensation.
- **Formula**: Service Credit × Age Factor × Final Compensation
- **Age factors range from 1.16% at 55 to 2.4% at 65+**
- **2% at 62 is the standard for full career teachers**
- Final compensation is highest 12 or 36 consecutive months (depending on membership date)
- Career earnings of $40,250+ provides additional longevity bonus
- Can purchase service credit for leaves, part-time work, or out-of-state teaching
Defined Benefit Supplement Program
The DB Supplement is an additional account that provides supplemental retirement income. It's not a 401(k) - it's part of CalSTRS with guaranteed minimum interest.
- Receives employer contributions (currently 8% of creditable compensation)
- Earns guaranteed minimum interest rate (currently around 4-5%)
- Can receive lump sum at retirement or annuitize for monthly payments
- Account passes to beneficiaries if you die before receiving full balance
- Separate from your Defined Benefit pension
- Most members have both DB and DBS accounts
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When Can You Retire?
CalSTRS has specific age and service requirements for retirement eligibility. Retiring before optimal age significantly reduces your benefit.
- **Normal retirement**: Age 55 with 5 years of service credit
- **Full benefit**: Age 62 provides 2.0% factor (higher if wait until 65)
- **Early retirement reduction**: Lower age factor before 62
- **30-year career**: Service bonus added after 30 years of service
- **Disability retirement**: Available regardless of age with 5 years of service
- One-time retirement incentive may be available depending on employer
Why California Teachers Need Supplemental Savings
Without Social Security for most of your career, your CalSTRS pension may be your only guaranteed retirement income. The 2% simple COLA often doesn't keep pace with inflation, and pension alone may not maintain your lifestyle.
- CalSTRS Pension2 offers 403(b) and 457 supplemental savings options
- You can contribute to both 403(b) and 457 plans simultaneously
- 457 plans have no 10% early withdrawal penalty upon separation
- At retirement, roll 403(b)/457 to IRA for more investment options
- Gold IRA provides inflation protection CalSTRS COLA may not match
- Augusta Precious Metals helps educators with 403(b)/457 rollovers to gold
Frequently Asked Questions
1How much pension will I receive from CalSTRS?
Your pension depends on your service credit, retirement age, and final compensation. A teacher retiring at 62 with 30 years of service and $90,000 final compensation would receive: 30 × 2.0% × $90,000 = $54,000 annually (60% of final salary).
2Can I work after CalSTRS retirement?
Yes, with restrictions. You must wait 180 days (unless exemption applies), can only work 960 hours per school year in CalSTRS-covered positions, and cannot earn more than your final compensation. Private sector work has no restrictions.
3What happens to my CalSTRS if I leave teaching early?
If you leave before vesting (5 years), you can only receive a refund of your contributions. After vesting, you can leave your money and receive a pension at retirement age, or take a refund (forfeiting employer contributions and interest).
4Does CalSTRS provide health insurance?
CalSTRS does not provide health insurance directly. However, CalSTRS offers a Medicare premium payment program for eligible members, and many school districts provide retiree health benefits separately from CalSTRS.
5How do I access my CalSTRS account?
Create a myCalSTRS account at myCalSTRS.com to view your service credit, benefit estimates, DBS account balance, and beneficiary information. You can also request detailed benefit projections for retirement planning.
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Social Security and CalSTRS
Most CalSTRS members don't contribute to Social Security from their teaching jobs. If you have Social Security from other employment, your benefits may be affected by WEP and GPO.