Ask Jack Jack Ehnes

Ask Jack: Can I retire early and receive my retirement benefit at a later date?

Yes. If you’re eligible to retire and are under the CalSTRS 2% at 60 benefit structure, you can retire as early as age 50 if you have at least 30 years of service credit. Or, you can retire at age 55 with at least five years of service credit. And you can leave your CalSTRS account open until you reach age 70 ½.

Here are options if you terminate your CalSTRS-covered employment but decide to leave CalSTRS account open:

  • Leave the account open and retire with CalSTRS at 55.
  • Leave the account open and retire at an older age. Each year until age 63, there will be an increase in your age factor which will increase your benefit. Your service credit, however, will not increase after termination from CalSTRS covered employment.  
  • Request a refund after you terminate CalSTRS-covered employment or at a later date. The Internal Revenue Service requires that you receive the Required Minimum Distribution no later than April 1 following the year that you have reached the age 70 ½.

In the Refund Application form, please note that “You will be taxed on your CalSTRS payment if you do not roll it over. If you are under age 59 ½ and do not do a rollover, you will also have to pay a 10 percent additional federal income tax and a 2.5 percent additional California income tax on early distributions unless an exception applies.”

To be eligible to retire through CalSTRS, a member must be at least age 55 and be vested with at least five years of service credit, or eligible to retire concurrently with another California public retirement system. If you plan to terminate CalSTRS-covered employment before reaching age 55, you can leave your funds with CalSTRS until you become eligible and are ready to initiate your retirement benefits.

Although you may choose to delay your retirement until age 70 ½ without tax penalty, you will reach your maximum retirement benefit calculation at age 63. Therefore, choosing a retirement date after age 63 would not increase your benefit calculation.

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