Retirement Benefits

Retirement Benefits

Overview

Your CalSTRS retirement benefit is a defined benefit pension. With five years of service credit, you’re eligible for a guaranteed lifetime retirement benefit based on a formula set by law:

Service Credit x Age Factor x Final Compensation = Retirement Benefit

You can increase your retirement benefit by increasing one or more of the elements in the retirement benefit calculation formula.

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Service Credit

Service credit is the accumulated period of time, in years and partial years, during which you receive creditable compensation and make contributions to the Defined Benefit Program. In addition to credit for actual service, you may receive service credit for creditable compensation for certain employer-approved leaves of absence. Service credit may also be purchased under certain circumstances.

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Age Factor

The age factor is the percent of final compensation you are entitled to for each year of service credit. This percentage is determined by the date you were first hired to perform CalSTRS creditable activities and your age on the last day of the month in which your retirement is effective.

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Final Compensation

If you are a CalSTRS 2% at 60 member, and you retire with 25 or more years of service credit, CalSTRS uses your highest 12 consecutive months of average annual compensation earnable as the final compensation component in your retirement calculation.

If you are a CalSTRS 2% at 62 member, your final compensation is based on your highest 36 consecutive months of average compensation earnable, and you are not eligible for 12 month final compensation.

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Deciding When to Retire

You can retire at age 55 with at least five years of service credit. Members under CalSTRS 2% at 60 also have the option to retire at age 50 with at least 30 years of service credit.

In addition, if you took a refund and then reinstated, you must have performed at least one year of service after the most recent refund.

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Inflation Protection

Your retirement benefit is protected against rising prices two ways: annual benefit adjustments and purchasing power protection.

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Benefit Enhancements

You may qualify for one or more benefit enhancements that will increase your monthly retirement benefit. 

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Electing an Option

To provide a lifetime monthly benefit to someone when you die, you can elect an option at retirement (this is different from the one-time death benefit). An option allows you to distribute your retirement benefit over your life and the life of your option beneficiaries. If you did not make a preretirement election of an option, your option election is effective as of your retirement date.