CalSTRS Pension Formula Basics Part One

How much is your CalSTRS retirement benefit?

As you start to plan your retirement (and your FI), learning what you will receive from your CalSTRS Pension is going to be in important step. The payments will roll in for life, and knowing your numbers will help you plan out whether you are able to retire.

How to determine your initial “Percent of Income”

Here’s the formula: Percent of Income = “Age Factor” X “Years of Service”

Note that the above formula/ calculation is only accurate if you are not leaving your pension to a beneficiary, which will reduce the percent of income you will receive.

Step One: Determine Your Age Factor

The age actor is a predetermined number that is posted on the CalSTRS site. I created the following table using that data.

If you were hired before 2013 you use the second column. If you were hired on or after you use the third column.

Interesting side note: in the far right column I calculated the difference in the age factor between the two pension structures at any given age. More on that in a different post.

Age Bonus!

If you are on the 2.0 at 60 tier (Hired before 2013), then you also get to add 0.2 to your age factor once you reach 30 years of service. Example: 60 years old with 30 years of credit you would look at the chart and use the factor of 2.0 plus 0.2 for a modified age factor of 2.2.

2.0 at 62 tier members do not get this bonus. 🙁

Step Two: Determine your “Years of Service”

There are also factors that go into determining your years of service, but if you worked full time, you count your years. At the time of this post I have completed 28 years of credited service. CalSTRS provides an updated version of this number on your account each year.

Step Three: Multiply Age Factor X Years of Service

This is just a simple multiplication problem for the most part. If you had 10 years of service at age 55, your would multiple 10 times 1.4 age factor and learn that you would have 14% of your income for life (10×1.4=14).

Now 14% doesn’t seem like much but for someone with a final salary of $100k it would be equivalent to having saved $350,000 using the rule of 25.

I did the math for you: Cool Look-Up Charts

I got a little crazy and created the following charts with all of the multipliers done for you. I factored in the service bonus as well for the first chart. To use the chart, look at your age and years of service and find your percent in the chart.

I don’t know why I have never been able to find a chart like this.

Percent of Income Look-Up Chart for 2.0 at 60

Years of Service	Age 55	56	57	58	59	60	61	62	63
5	7	7.6	8.2	8.8	9.4	10	10.65	11.35	12
6	8.4	9.12	9.84	10.56	11.28	12	12.78	13.62	14.4
7	9.8	10.64	11.48	12.32	13.16	14	14.91	15.89	16.8
8	11.2	12.16	13.12	14.08	15.04	16	17.04	18.16	19.2
9	12.6	13.68	14.76	15.84	16.92	18	19.17	20.43	21.6
10	14	15.2	16.4	17.6	18.8	20	21.3	22.7	24
11	15.4	16.72	18.04	19.36	20.68	22	23.43	24.97	26.4
12	16.8	18.24	19.68	21.12	22.56	24	25.56	27.24	28.8
13	18.2	19.76	21.32	22.88	24.44	26	27.69	29.51	31.2
14	19.6	21.28	22.96	24.64	26.32	28	29.82	31.78	33.6
15	21	22.8	24.6	26.4	28.2	30	31.95	34.05	36
16	22.4	24.32	26.24	28.16	30.08	32	34.08	36.32	38.4
17	23.8	25.84	27.88	29.92	31.96	34	36.21	38.59	40.8
18	25.2	27.36	29.52	31.68	33.84	36	38.34	40.86	43.2
19	26.6	28.88	31.16	33.44	35.72	38	40.47	43.13	45.6
20	28	30.4	32.8	35.2	37.6	40	42.6	45.4	48
21	29.4	31.92	34.44	36.96	39.48	42	44.73	47.67	50.4
22	30.8	33.44	36.08	38.72	41.36	44	46.86	49.94	52.8
23	32.2	34.96	37.72	40.48	43.24	46	48.99	52.21	55.2
24	33.6	36.48	39.36	42.24	45.12	48	51.12	54.48	57.6
25	35	38	41	44	47	50	53.25	56.75	60
26	36.4	39.52	42.64	45.76	48.88	52	55.38	59.02	62.4
27	37.8	41.04	44.28	47.52	50.76	54	57.51	61.29	64.8
28	39.2	42.56	45.92	49.28	52.64	56	59.64	63.56	67.2
29	40.6	44.08	47.56	51.04	54.52	58	61.77	65.83	69.6
30	48	51.6	55.2	58.8	62.4	66	69.9	72	72
31	49.6	53.32	57.04	60.76	64.48	68.2	72.23	74.4	74.4
32	51.2	55.04	58.88	62.72	66.56	70.4	74.56	76.8	76.8
33	52.8	56.76	60.72	64.68	68.64	72.6	76.89	79.2	79.2
34	54.4	58.48	62.56	66.64	70.72	74.8	79.22	81.6	81.6
35	56	60.2	64.4	68.6	72.8	77	81.55	84	84
36	57.6	61.92	66.24	70.56	74.88	79.2	83.88	86.4	86.4
37	59.2	63.64	68.08	72.52	76.96	81.4	86.21	88.8	88.8
38	60.8	65.36	69.92	74.48	79.04	83.6	88.54	91.2	91.2
39	62.4	67.08	71.76	76.44	81.12	85.8	90.87	93.6	93.6
40	64	68.8	73.6	78.4	83.2	88	93.2	96	96
41	65.6	70.52	75.44	80.36	85.28	90.2	95.53	98.4	98.4
AGE:	55	56	57	58	59	60	61	62	63
Age Factor	1.4	1.52	1.64	1.76	1.88	2	2.13	2.27	2.4

Example Using Me:

Years of service runs down and age runs across. When I turn 55, I will have 30 years of service so I look up the chart and see 48…. I will receive 48% of my income!

Projecting Forward

I have bolded all of my personal values on this chart. And running down and diagonally I can see my percent as it increases. At age 60 I would receive 77% of my income and at age 63 I would receive 91.2% of my income. For life!

Now lets look at the second tier…

Percent of Income Look-Up Chart for 2.0 at 62

Years of Service	Age 55	56	57	58	59	60	61	62	63	64	65
5	5.8	6.4	7	7.6	8.2	8.8	9.4	10	10.65	11.35	12
6	6.96	7.68	8.4	9.12	9.84	10.56	11.28	12	12.78	13.62	14.4
7	8.12	8.96	9.8	10.64	11.48	12.32	13.16	14	14.91	15.89	16.8
8	9.28	10.24	11.2	12.16	13.12	14.08	15.04	16	17.04	18.16	19.2
9	10.44	11.52	12.6	13.68	14.76	15.84	16.92	18	19.17	20.43	21.6
10	11.6	12.8	14	15.2	16.4	17.6	18.8	20	21.3	22.7	24
11	12.76	14.08	15.4	16.72	18.04	19.36	20.68	22	23.43	24.97	26.4
12	13.92	15.36	16.8	18.24	19.68	21.12	22.56	24	25.56	27.24	28.8
13	15.08	16.64	18.2	19.76	21.32	22.88	24.44	26	27.69	29.51	31.2
14	16.24	17.92	19.6	21.28	22.96	24.64	26.32	28	29.82	31.78	33.6
15	17.4	19.2	21	22.8	24.6	26.4	28.2	30	31.95	34.05	36
16	18.56	20.48	22.4	24.32	26.24	28.16	30.08	32	34.08	36.32	38.4
17	19.72	21.76	23.8	25.84	27.88	29.92	31.96	34	36.21	38.59	40.8
18	20.88	23.04	25.2	27.36	29.52	31.68	33.84	36	38.34	40.86	43.2
19	22.04	24.32	26.6	28.88	31.16	33.44	35.72	38	40.47	43.13	45.6
20	23.2	25.6	28	30.4	32.8	35.2	37.6	40	42.6	45.4	48
21	24.36	26.88	29.4	31.92	34.44	36.96	39.48	42	44.73	47.67	50.4
22	25.52	28.16	30.8	33.44	36.08	38.72	41.36	44	46.86	49.94	52.8
23	26.68	29.44	32.2	34.96	37.72	40.48	43.24	46	48.99	52.21	55.2
24	27.84	30.72	33.6	36.48	39.36	42.24	45.12	48	51.12	54.48	57.6
25	29	32	35	38	41	44	47	50	53.25	56.75	60
26	30.16	33.28	36.4	39.52	42.64	45.76	48.88	52	55.38	59.02	62.4
27	31.32	34.56	37.8	41.04	44.28	47.52	50.76	54	57.51	61.29	64.8
28	32.48	35.84	39.2	42.56	45.92	49.28	52.64	56	59.64	63.56	67.2
29	33.64	37.12	40.6	44.08	47.56	51.04	54.52	58	61.77	65.83	69.6
30	34.8	38.4	42	45.6	49.2	52.8	56.4	60	63.9	68.1	72
31	35.96	39.68	43.4	47.12	50.84	54.56	58.28	62	66.03	70.37	74.4
32	37.12	40.96	44.8	48.64	52.48	56.32	60.16	64	68.16	72.64	76.8
33	38.28	42.24	46.2	50.16	54.12	58.08	62.04	66	70.29	74.91	79.2
34	39.44	43.52	47.6	51.68	55.76	59.84	63.92	68	72.42	77.18	81.6
35	40.6	44.8	49	53.2	57.4	61.6	65.8	70	74.55	79.45	84
36	41.76	46.08	50.4	54.72	59.04	63.36	67.68	72	76.68	81.72	86.4
37	42.92	47.36	51.8	56.24	60.68	65.12	69.56	74	78.81	83.99	88.8
38	44.08	48.64	53.2	57.76	62.32	66.88	71.44	76	80.94	86.26	91.2
39	45.24	49.92	54.6	59.28	63.96	68.64	73.32	78	83.07	88.53	93.6
40	46.4	51.2	56	60.8	65.6	70.4	75.2	80	85.2	90.8	96
41	47.56	52.48	57.4	62.32	67.24	72.16	77.08	82	87.33	93.07	98.4
AGE:	55	56	57	58	59	60	61	62	63	64	65
Age Factor	1.16	1.28	1.4	1.52	1.64	1.76	1.88	2	2.13	2.27	2.4

I am not personally under this tier, but I provide it for the service of the youngsters and late starters.

Summary

To close it out for this post, you can start to estimate your CalLSTRS retirement by calculating or looking up your “Percent of Income.” Whether this is enough for you to retire on is a different matter completely. But get started by looking at the charts, or doing the math on your own to get the ball rolling. Cheers!

Caveats: All of the above only determines the initial pension percent payment. Your pension will increase over time. Don’t get too excited though; inflation will decrease your purchasing power.

Disclaimer

I am a teacher interested in finance. This post contains my opinions and spin and is not intended as financial advice. No warranties. I used available information from the CalSTRS website.