CalSTRS serves more than 1 million California public school educators and beneficiaries, and its investment portfolio was worth $367.7 billion on June 30, 2025, according to its 2026 member handbook. The formula, the tier you're in, and the DB Supplement account all affect your final retirement income. Here's what you need to know.
The CalSTRS benefit formula
Your CalSTRS defined benefit is: age factor x years of service credit x final compensation.
The age factor is the percentage per year of service that you earn, and it varies by your formula and your age at retirement. It reaches 2.0% at 60 (2% at 60) or 62 (2% at 62) and tops out at 2.4%. Retiring earlier gets a lower factor, as low as 1.1% at 50.
Final compensation is the average of your highest 36 consecutive months. Members under 2% at 60 with 25 or more years of service use their highest 12 consecutive months instead, and so do classroom teachers whose collective bargaining agreement provides a 12-month final compensation period; members under 2% at 62 always use 36.
2% at 60 vs. 2% at 62
If you were hired before January 1, 2013, you're in CalSTRS 2% at 60. Your standard age factor is 2.0% at age 60, stepping up to 2.4% at age 63 or later. With 30 or more years of service, a 0.2% career factor is added, so you reach the 2.4% maximum at 61 and six months. You can retire as early as 55 with 5 years of service, or 50 with 30 years, with a reduced factor.
If you were hired on or after January 1, 2013, you're under the CalSTRS 2% at 62 formula (part of the Public Employees' Pension Reform Act, known as PEPRA). Your standard age factor is 2.0% at age 62. The maximum factor of 2.4% applies at age 65 or later, and there's no career factor. Your final compensation is always a 3-year average; there's no one-year option. Early retirement begins at age 55, with reduced factors.
The 2013 reform reduced benefits for new hires in exchange for more sustainable plan funding. If you're in 2% at 60 and retire at 63 with 30 years, your multiplier is the same as a new hire at 65 with 30 years. The practical difference is mostly in the final compensation averaging period and the retirement age for full benefits.
The Defined Benefit Supplement
CalSTRS has a second component called the Defined Benefit Supplement, or DB Supplement. It's a separate account, not a separate pension.
The DB Supplement is funded by contributions on pay for service beyond one year of service credit in a school year, plus guaranteed interest and any extra earnings credits the board declares. The details are further down.
At retirement, you can take the balance as a lump sum, as an annuity or as a mix. Log into myCalSTRS to see yours.
No Social Security for most California teachers
Most California public school teachers don't pay into Social Security and don't earn SS credits from their teaching work. If you worked in Social Security-covered employment before or after teaching, those benefits were previously subject to the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO).
Both the WEP and GPO were fully repealed by the Social Security Fairness Act (signed January 5, 2025) for benefits payable after December 2023. If either provision previously reduced your Social Security benefit, you should now receive your full earned amount plus retroactive payments back to January 2024. Use the WEP calculator to estimate how much you're owed.
CalSTRS funding
CalSTRS isn't fully funded, and the 2014 CalSTRS Funding Plan raised contribution rates for the state, school districts and members to close the gap. For members, the more useful fact is in the handbook: under that Funding Plan, the Legislature can't reduce the 2% annual benefit adjustment for anyone who retired on or after January 1, 2014.
How to estimate your CalSTRS benefit
The most accurate way is to log into your myCalSTRS account. It uses your actual service credit, compensation history and Defined Benefit Supplement balance, and it lets you model different retirement dates.
As a quick estimate, multiply your age factor by your years of service by your final compensation. A 2% at 60 member retiring at 63 with 32 years and $85,000 of final compensation earns 0.024 x 32 x $85,000 = $65,280 a year, or $5,440 a month, before any beneficiary option. Members who had 30 or more years by December 31, 2010 also get a longevity bonus of $200 to $400 a month.
Full plan details are on the California state pension page.
Three programs
CalSTRS runs the Defined Benefit Program (the lifetime pension), the Defined Benefit Supplement account that comes with it, and the Cash Balance Benefit Program, which covers some part-time educators who aren't in the Defined Benefit Program. Which one you're in sets both the formula and your payout choices. Most full-time K-12 and community college educators are in the Defined Benefit Program.
Social Security
The CalSTRS handbook is plain about it: as a public school educator contributing to CalSTRS, you don't pay into Social Security and won't get a Social Security benefit for that work. You may still qualify through other jobs or through your spouse. The handbook suggests putting the 6.2% you'd otherwise pay into Social Security into a 403(b) or 457(b) instead.
If you have Social Security from other work, the Social Security Fairness Act (signed January 5, 2025) removed the Windfall Elimination Provision and the Government Pension Offset for benefits payable after December 2023, so neither one cuts your check any more.
2% at 60 against 2% at 62
Members first hired before January 1, 2013 are in 2% at 60, where the age factor tops out at 2.4% at 63. Members first hired on or after that date are in 2% at 62 (the PEPRA formula), where 2.4% takes until 65.
A 2% at 60 member who retires at 60 with 30 years gets the 0.2% career factor, so 2.2% x 30 = 66% of final compensation. At 63 it's 2.4% x 30 = 72%, about 9% more a month for three more years of waiting, holding service constant. A 2% at 60 member with 25 years at 60 gets 2.0% x 25 = 50%, and 60% at 63. A 2% at 62 member gets no career factor and has to wait until 65 for 2.4%.
Beneficiary options
The Member-Only Benefit is the highest monthly payment and stops when you die. To leave a monthly benefit to someone, you elect a Modified Benefit: the 100% Beneficiary Option, the 75% Beneficiary Option or the 50% Beneficiary Option, each paying your option beneficiary that share of what you were receiving. Under all three, if your beneficiary dies first, your payment rises back to the Member-Only amount. A Compound Option lets you split your benefit among more than one beneficiary or keep part of it as Member-Only.
If you're married and don't elect an option, CalSTRS needs your spouse's or registered domestic partner's signature, or a Justification for Non-Signature form. Divorcing members should also know that CalSTRS benefits earned during marriage are community property in California.
Inflation protection
CalSTRS pays an annual benefit adjustment equal to 2% of your initial benefit, starting September 1 after the first anniversary of your retirement. It's simple, not compounded, and it isn't tied to the cost of living. A $5,000 initial benefit goes up $100 every year.
On top of that, CalSTRS makes quarterly supplemental payments to retirees whose benefits have fallen below 85% of their original purchasing power, subject to available funds. That's the purchasing power protection. It sets a floor. It doesn't keep you whole.
That's why savings outside CalSTRS matter. A 403(b) or 457(b) gives you money that can be drawn harder in years when prices outrun your pension.
What the pension is worth as a lump sum
CalSTRS doesn't offer a lump sum in place of the Defined Benefit pension. Still, it's useful to know what the income stream is worth. Run the $5,440 a month from the example above through our present value calculator at 63, using the 2026 IRS 417(e) rates and mortality table, and you get about $836,000. That figure ignores the 2% annual adjustment, so the real value is higher.
The 403(b) supplement
The 2026 403(b) deferral limit is $24,500, or $32,500 with the age-50 catch-up, and members aged 60 to 63 can add $11,250 instead of $8,000 (IRS Notice 2025-67). Putting in $10,000 a year from 35 to 65 at a 6% return grows to about $790,000. Drawn at 4% a year, that's about $31,600, or $2,635 a month.
The Defined Benefit Supplement account
The Defined Benefit Supplement account is funded by contributions on earnings for service beyond one year of service credit in a school year, which usually means extra-pay assignments. For 2% at 60 members, you and your employer each put in 8% of those earnings, plus 8% of special limited-term payments. For 2% at 62 members it's 9% from you and 8% from your employer. Between 2001 and 2010, a quarter of the 8% member contribution was also redirected into the account.
The account earns a guaranteed rate set each fiscal year (4.48% for 2025-26; myCalSTRS shows the current year's rate), and the board can declare extra earnings credits in good years. At retirement you can take it as a lump sum, an annuity or a mix. Balances under $3,500 have to be paid as a lump sum. Check myCalSTRS for your balance, since it depends entirely on how much extra-pay work you did.
Buying service credit
CalSTRS lets members buy permissive service credit for certain kinds of eligible service and redeposit refunded contributions, plus interest, to restore service from an earlier refund. The handbook says the earlier you buy, the lower the cost. You can estimate the price in myCalSTRS. Compare it with the added monthly income: at $85,000 of final compensation and a 2.4% age factor, each extra year adds $2,040 a year.
Disability
CalSTRS pays disability benefits too. The basic disability benefit is 50% of final compensation, plus 10% for each eligible child, up to 90%. Which coverage you're under (Coverage A or Coverage B) changes the rules, so read the disability section of the handbook or call CalSTRS.
Retiree health
CalSTRS doesn't provide health or dental insurance. Your district might offer retiree coverage, and CalSTRS can deduct premiums from your benefit, but you need to ask your employer what's available. Most CalSTRS members hired after April 1986 paid the 1.45% Medicare tax, which can earn premium-free Part A. Call Social Security to confirm.
CalSTRS and CalPERS
CalSTRS covers public school educators. CalPERS covers state employees, school employees outside CalSTRS and workers at local agencies that contract with it. Each system figures its own benefit on its own service, so someone who taught and then worked for the state gets two pensions. Both belong in the plan.
Picking a date
Under 2% at 60, every quarter-year between 60 and 63 adds 0.033% to the age factor, and every year adds service. Model each possible retirement date in myCalSTRS, see how much each extra year adds, and stop when the extra income no longer seems worth another year at work.