The Formula, In Plain English
Your CalSTRS pension is not a guess and it is not tied to the stock market. It is calculated using a straightforward formula:
What Service Credit Means
Service credit is the number of years (and partial years) you have worked in a CalSTRS-covered position. Every year you teach adds to this number, which directly increases your eventual pension. Unused sick leave may also convert to additional service credit - see our sick leave guide for more on that.
What Age Factor Means
The age factor is a percentage that increases the longer you wait to retire, up to a maximum. Your specific age factor schedule depends on your CalSTRS membership tier, which is generally tied to when you were first hired. See our 2% at 60 vs 2% at 62 guide for the tier breakdown.
What Final Compensation Means
Final compensation is your highest average salary, calculated either as your single highest year or your highest three consecutive years, depending on your hire date and membership tier. Because this number is locked in based on your final working years, late-career salary decisions can meaningfully change your pension. Our final compensation guide goes deeper on this.
An Example Calculation
A teacher with 30 years of service credit, retiring at age 62 with an age factor around 2.4%, and a final compensation of $90,000, would calculate roughly as: 30 × 2.4% × $90,000 = approximately $64,800 per year for life. The exact numbers vary by individual circumstances.
Why Retirement Age Matters
Because the age factor increases with age, retiring earlier generally means a lower percentage - even with the same years of service. Waiting longer increases both your service credit and your age factor simultaneously. See our retirement age guide for a closer look at how this plays out at different ages.