How does my CalSTRS or CalPERS pension actually work?

Your pension is a guaranteed monthly payment for life, generally determined by a formula: years of service credit multiplied by your age factor multiplied by your highest average salary. Unlike a 401(k), it does not depend on the stock market and it does not run out, and every year you work increases it. This CalSTRS example shows a teacher with 30 years of service retiring at 62 on a $90,000 salary receiving approximately $54,000 per year for life. CalPERS uses a similar three-part formula, though the specific tables depend on your CalPERS classification.

Will my pension be enough to retire on?

For most teachers, not entirely. The average CalSTRS pension replaces about 54% of final salary. If your pension is your only source of retirement income, there is a good chance a retirement income gap exists. Understanding the size of that gap and what to do about it is the core of what a pension income review addresses.

What is a retirement income gap and why does it matter?

A retirement income gap is the difference between what your pension pays and what you actually need in retirement. It is personal to your situation - your expenses, debts, dependents, and lifestyle all factor in. Identifying it early gives you time and options. Identifying it late limits both.

When should I start thinking about retirement planning?

The honest answer is the first year you teach. The decisions you make early compound over decades in ways that are very difficult to replicate later. Teachers who start later in their careers have a shorter window and need a more deliberate strategy.

Is there a way to maximize my pension and still protect my spouse?

For some teachers, yes. There are planning strategies that allow you to elect the highest unmodified benefit while still ensuring a surviving spouse is protected through other means. Schedule a complimentary retirement income review to see which strategies may be best suited for your personal financial situation.

What happens in the complimentary review?

A one-hour pension income review with one of our retirement income and pension education professionals. We produce a personalized CalSTRS benefit projection at multiple retirement ages, a side-by-side comparison of your benefit election options with real dollar figures, and a retirement income gap analysis. If a gap exists, we walk through protected retirement income strategies that may be appropriate for your situation.

California Teacher Retirement Planning | CalSTRS & CalPERS Review

Where are you in your career?

Your retirement picture looks different at every stage

Select your stage. The questions and priorities shift significantly depending on where you are in your career.

The stages below are written from a CalSTRS perspective. If you are covered by CalPERS or another public retirement system, the same core questions - service credit, timing, and any retirement income gap - still apply, though your specific formula and rules will differ.

0 to 5 years: the decisions you make now follow you forever

Retirement feels distant at this stage. It is not. The service credit you build now, and the supplemental savings you start now, directly determine the floor of your retirement income for the rest of your life.

Am I enrolled in CalSTRS correctly?+

Confirm with HR that you are enrolled from your very first paycheck. Gaps in enrollment are difficult to correct and permanently affect the service credit your pension is built on.

What exactly is a pension and why does mine matter?+

Your CalSTRS pension is a guaranteed monthly payment for life, determined by a formula rather than market performance. Your benefit is calculated using your years of service credit multiplied by your age factor and your final compensation — which is either your highest single year of earnings or your highest three consecutive years, depending on when you were hired. Every year you teach adds to this number, and the benefit election you choose at retirement also directly affects your monthly payment.

My pension covers everything, right?+

Not entirely. The average CalSTRS pension replaces about 54% of a teacher's final salary. If your pension is your only source of retirement income, there is a good chance it will not cover everything you need. Retirement income gaps are common, and the earlier you address yours, the more options you have.

What should I be doing right now?+

Two things matter most at this stage: protect your service credit and explore protected retirement income options that can supplement your pension over time. Many California educators have access to 403(b) tax-sheltered annuity programs that, started early, can make a meaningful difference by retirement. A pension income review is the best place to start that conversation.

Protected strategies may include insurance and annuity-based options offered by licensed insurance professionals.

The question this stage leaves open: How much do I need to save, in what vehicle, and when? A complimentary pension income review gives you a starting plan built around your specific situation.

Schedule Your Pension Income Review

Why starting age matters more than most teachers realize

Start at 22, 40 yrs, 80% replaced

$68,000/yr on $85k salary

Start at 27, 35 yrs, 70% replaced

$59,500/yr

Start at 32, 30 yrs, 60% replaced

$51,000/yr

Start at 37, 25 yrs, 50% replaced

$42,500/yr

Illustrative. 2.0% age factor, $85,000 final compensation.

Starting later does not mean starting behind. It means the supplemental strategy needs to be right. That is exactly what a professional review is designed to build.

6 to 15 years: you have built something. Do you know how much?

You are vested and a pension is waiting. The most important thing now is understanding the full picture, because decisions made in this window significantly shape what retirement actually looks like.

How much will my pension actually pay me?+

That depends on your years of service, your retirement age, your highest average salary, and the benefit election you make at retirement. Projections vary significantly at different retirement ages. A personalized CalSTRS benefit illustration gives you real figures across multiple scenarios — not a general estimate.

Should I be looking at supplemental retirement options?+

Many California educators have access to 403(b) tax-sheltered annuity programs through their school district. Annuity-based 403(b) options can provide protected, predictable income to help supplement your pension over time. A pension income review can help you understand whether these options make sense for your situation.

Do I know my CalSTRS membership tier?+

It depends on when you were hired. Before January 1, 2013 means the 2% at 60 formula. On or after that date means PEPRA - 2% at 62. Your tier determines the optimal retirement age for your situation, which has significant impact on your monthly benefit for life.

The question this stage leaves open: What will my pension actually pay, and do I have a retirement income gap worth addressing? A complimentary pension income review gives you a personalized CalSTRS projection and a clear answer.

Schedule Your Pension Income Review

What to focus on at this stage

Now

Confirm your CalSTRS tier and get a benefit estimate at different retirement ages.

This year

Start or increase 403(b) contributions. Even a small increase now compounds significantly over 15 to 20 years.

Before retirement

Understand your retirement gap and benefit election options so you are not making permanent decisions under pressure.

A professional review helps you build a clear plan for all three.

16 to 25 years: the details start to matter enormously

You are close enough to see retirement on the horizon. The choices you make now around salary, savings, and timing are the ones that will determine your quality of life for decades.

How does my final salary affect my pension?+

Your pension is based on your highest average salary period. Maximizing earnings in your final 1 to 3 years directly and permanently raises your monthly check. Even a $3,000 to $5,000 increase can mean hundreds of additional dollars per month for life.

Is my sick leave worth anything?+

Yes. Unused sick leave converts to additional service credit at retirement. Many teachers gain close to a full year of credit from accumulated days. Protecting that balance as retirement approaches can meaningfully add to your monthly pension for life.

When is the right time to retire?+

This is one of the most consequential questions in retirement planning and the answer is different for every teacher. Retiring at 65 instead of 62 can increase your annual pension by more than $10,000 permanently. That math is worth running correctly, with someone who can model the scenarios using your actual numbers. Let us do that analysis with you.

What about healthcare before Medicare?+

CalSTRS does not provide health insurance. If your district does not offer retiree coverage, plan for individual premiums from your retirement date until Medicare eligibility at 65. For many teachers this is the single largest unplanned cost in early retirement.

The question this stage leaves open: What is the optimal retirement date for my situation and am I on track? A personalized pension income review models this with your real numbers, not general estimates.

Schedule Your Pension Income Review

The value of waiting - same teacher, different outcome

Retire at 62

$51,000/yr

30 yrs x 2.0% x $85,000

Retire at 63

$56,355/yr

+$5,355/yr for life

Retire at 65

$64,872/yr

+$13,872/yr for life, breaks even in about 11 years

The right retirement age is personal. A professional review models your specific scenarios so the decision is based on your numbers.

26+ years: preparation separates a good retirement from a great one

You have spent a career building toward this. The final stretch is not the time to guess. A few specific decisions made in the next year or two will lock in your retirement income for the rest of your life.

Do I know my actual retirement benefit?+

A general estimate and an official benefit illustration are two very different things. In the two to three years before retirement, you need precise figures for what your pension pays at each possible retirement date. This is the foundation of every other decision you make from here.

What are my benefit election options?+

At retirement you choose an election that determines how much of your pension you receive each month and how much, if anything, continues to a surviving spouse. Options range from the full unmodified benefit that stops when you do, to continuance options at 50%, 75%, or 100%. This decision is permanent and irrevocable.

Can I maximize my benefit and still protect my family?+

For some teachers, yes. There are strategies that allow you to elect the higher unmodified benefit while still ensuring a surviving spouse is protected through planning put in place before retirement. Schedule a complimentary retirement income review to see which strategies may be best suited for your personal financial situation.

What should I do in the next 12 months?+

Request your official CalSTRS benefit illustration, review your benefit election options carefully, assess your healthcare coverage after retirement, and sit down with a retirement planning professional who can bring all of these pieces together before any permanent decisions are made.

You are too close to leave this to chance.

A complimentary pension income review with one of our retirement income and pension education professionals gives you a complete, personalized picture before any permanent decisions are made. You will leave with clarity you did not have going in.

Schedule Your Pension Income Review

Conversations your review will address

Each of these is addressed directly in your complimentary review.

Retirement age	Age factor	Annual pension (30 yrs, $85k)
55	1.16%	$29,580
59	1.76%	$44,880
62 - standard full benefit	2.00%	$51,000
65	2.40%	$61,200

The Retirement Income Gap

Most California educators are surprised when they see their retirement income gap

Your pension is guaranteed. But how far it goes depends entirely on what your retirement actually costs. That number is different for everyone and it is the starting point for any honest retirement conversation.

The 54% figure below reflects the average CalSTRS replacement rate. CalPERS replacement rates follow the same idea - pension income compared against what retirement actually costs - but the specific percentage depends on your own formula and years of service.

What your pension typically covers

54%

The average CalSTRS pension replaces approximately 54% of a teacher's final salary. Whether that is enough depends on your life - your expenses, your debts, your dependents, and what retirement looks like for you specifically.

What the retirement income gap actually means

If your pension is your only source of retirement income, there is a good chance it will not cover everything you need. How large that gap is and whether it matters for your situation is exactly what a review is designed to find out.

The earlier you find your retirement income gap, the more you can do about it

A teacher who identifies a gap at 35 has decades to address it steadily. The same teacher finding it at 58 has a much shorter runway and fewer options. Identifying it early is not about alarm - it is about having choices.

CalSTRS Quick Pulse

Get a rough sense of where you stand

This is a ballpark only. It does not account for salary growth, sick leave credit, or your specific CalSTRS tier. Use it as a starting point, not a plan.

Current age: 35

Current years of service: 10

Current annual salary: $80,000

Estimated CalSTRS annual pension at 62

$35,200/yr

44% of salary - a modest gap may exist

Want a real picture, not just a ballpark?

California Pension Review runs a more thorough diagnostic in about 3 minutes. It factors in your specific inputs and produces a personalized retirement income snapshot. From there, you can book a complimentary review with one of our professionals, who will go through your actual CalSTRS or CalPERS retirement income projections, benefit election options, and any gap in detail.

Run my retirement income snapshot Takes about 3 minutes. Nothing required to get started.

CalSTRS or CalPERS Benefit Elections

The decisions that shape your retirement income permanently

When you file for retirement, you choose a benefit election. It is a single, permanent decision that determines how much of your pension you receive each month for life and how much, if anything, continues to a surviving spouse or beneficiary after you are gone.

Most teachers do not know all their options until it is almost too late to plan around them. Understanding the tradeoffs well before you file is what a review is specifically designed to deliver.

The options below reflect CalSTRS terminology. CalPERS offers a comparable set of election choices - an unmodified option and several beneficiary continuance levels - under its own naming and rules.

Option 1

Unmodified - 100% Member Benefit

The highest possible monthly payment. Maximized for as long as you live. When you die, all payments stop and your beneficiary receives nothing from CalSTRS.

Consider if: You are single, or have separate income protection already in place for a surviving spouse.

Option 2

100% Beneficiary Continuance

Your beneficiary receives your full monthly benefit after you die, for the rest of their life. Your own payment is reduced now to fund that guarantee.

Consider if: Your spouse relies heavily on your income and has limited independent savings.

Option 3

75% Beneficiary Continuance

Your beneficiary receives 75% of your monthly benefit after you die. A smaller reduction to your own check than the 100% option, with meaningful protection still in place.

Consider if: You want meaningful spousal protection while preserving more of your own monthly income.

Option 4

50% Beneficiary Continuance

Your beneficiary receives half your monthly benefit after you die. The smallest reduction to your own check, but also the least protection left behind.

Consider if: Your spouse has meaningful independent income or savings but you still want some continuance in place.

Important

This decision cannot be changed once you retire

Your benefit election is permanent the moment you file. There is no going back if circumstances change, which is exactly why it deserves careful thought well before your retirement date.

Something worth knowing

There may be a smarter way to structure this

Some members are able to elect the higher unmodified benefit while still ensuring their family is protected through planning strategies put in place before retirement. Schedule a complimentary retirement income review to explore which strategies may be best suited for your personal situation.

Your Complimentary CalSTRS or CalPERS Retirement Review

One conversation. Two problems addressed. Real numbers.

Everything on this page points to one question: what should you actually do? A complimentary pension income review is where the general becomes personal. We take your specific numbers and work through the two things that matter most.

The specifics below are shown from a CalSTRS perspective. If you are a CalPERS member, your review covers the same two concerns using your own projection and election rules.

Concern 01

Your retirement gap - and how to close it

Your personalized CalSTRS or CalPERS projection - your actual estimated benefit at multiple retirement ages, based on your service credit and salary history. Not a general estimate. Your number.

Your retirement income gap analysis - what your pension pays versus what you will actually need, presented clearly so you can see exactly where you stand.

A clear path to close the gap - if one exists, we walk through strategies available to you, tailored to your career stage, your timeline, and your household.

Concern 02

Your benefit election - and protecting your family

Side-by-side benefit election comparison - what each option pays you monthly and what it pays your beneficiary, with real dollar figures specific to your ages and situation.

Maximizing your pension benefit - exploring whether strategies exist that allow you to elect the highest monthly benefit while still ensuring your spouse or beneficiaries are protected after you are gone.

A decision made with full information - your benefit election is permanent. We make sure you understand every option and every tradeoff before you commit to anything.

For the people who spend their lives shaping others.

Teachers and the broader public education community give a great deal to their students and schools, often without much thought for what comes next for themselves. This complimentary review exists to give something back - a clear, honest look at your retirement income picture so you can make good decisions with confidence. Come in with your questions. Leave with answers.

Schedule Your Pension Income Review About one hour - in person or by virtual meeting

The Team

Who you will speak with

Hostetter Financial Group has spent decades serving California public school educators, with deep experience helping teachers understand CalSTRS and retirement income planning. The broader education community also includes administrators, classified staff, and other public education employees who may need to understand CalPERS or another public retirement system depending on their role and employer. When you sit down with our team, you are not a first conversation. You are one of more than 40,000.

40,000+

teachers and public education employees served

30+

retirement income professionals

Decades

of combined CalSTRS and CalPERS retirement income planning experience

The professionals below are based in Calabasas and available to meet with you locally throughout LA, Ventura, San Bernardino, and Santa Barbara counties — in our home office or at a location convenient for you. Our broader network of associates serves educators statewide. All clients are also welcome to connect by virtual meeting.

Jim Hostetter

Founder - Hostetter Financial Group

CA Insurance License #0633459

Jim founded Hostetter Financial Group nearly 40 years ago with a singular focus on serving California's public education community. Over that time he has personally guided thousands of teachers and other public education employees through the CalSTRS and CalPERS planning process, helping them understand their pension, identify their retirement income needs, and make the decisions that protect their financial future.

(818) 225-1912jhostetterfinancialgroup@gmail.com

Darin Tinglof

Retirement Income & Pension Education Professional

CA Insurance License #0782444

Darin has worked alongside Jim for over 35 years, building a practice grounded in the same commitment to California's public education community. With nearly four decades of experience, he has personally helped thousands of teachers and other public education employees navigate CalSTRS and CalPERS, understand their retirement income options, and plan with confidence for what comes next.

(818) 968-3943DarinTinglof@yahoo.com

Donovan Tinglof

Retirement Income & Pension Education Professional

CA Insurance License #0M83477

Donovan grew up around this business, watching his father Darin help California's public education community understand their pensions and plan for retirement with confidence. That early exposure left him with a genuine appreciation for the work educators do and a desire to give something back to them. He joined Hostetter Financial Group to carry that family commitment forward, drawing on decades of combined CalSTRS and CalPERS retirement income planning experience built alongside his father and Jim. He holds a B.S. in Business Administration with a concentration in Financial Management from Cal Poly San Luis Obispo, where he graduated Magna Cum Laude.

(805) 217-2851 Donovan.Tinglof.Financial@gmail.com

Your pension is a guarantee.Is it enough?

Your retirement picture looks different at every stage

0 to 5 years: the decisions you make now follow you forever

Why starting age matters more than most teachers realize

6 to 15 years: you have built something. Do you know how much?

What to focus on at this stage

16 to 25 years: the details start to matter enormously

The value of waiting - same teacher, different outcome

26+ years: preparation separates a good retirement from a great one

Conversations your review will address

Three steps to retirement clarity

Understand how your CalSTRS or CalPERS pension is built

Identify whether you have a retirement income gap

Make a plan with someone who knows your world

How your monthly pension is determined

Most California educators are surprised when they see their retirement income gap

The earlier you find your retirement income gap, the more you can do about it

Get a rough sense of where you stand

Want a real picture, not just a ballpark?

The decisions that shape your retirement income permanently

Unmodified - 100% Member Benefit

100% Beneficiary Continuance

75% Beneficiary Continuance

50% Beneficiary Continuance

This decision cannot be changed once you retire

There may be a smarter way to structure this

Retirement income gaps are common. What matters is knowing yours.

One conversation. Two problems addressed. Real numbers.

Your retirement gap - and how to close it

Your benefit election - and protecting your family

For the people who spend their lives shaping others.

Schedule your complimentary CalSTRS or CalPERS retirement review

Virtual meeting

In-person visit

Give us a call

Who you will speak with

Jim Hostetter

Darin Tinglof

Donovan Tinglof

Questions California teachers ask most

Ready to see where you actually stand?

Your pension is a guarantee.
Is it enough?