Get the facts on Social Security
As a California public school educator, you do not contribute to
Social Security, so you will not receive a Social Security benefit
for your CalSTRS-covered employment when you retire.
If you or a spouse paid into Social Security through other
employment, two federal rules—the Windfall Elimination
Provision and the Government Pension Offset—may be used in
the calculation of your Social Security benet. The application
of these offsets may leave you with a smaller Social Security
benet or possibly no Social Security benet at all.
Your CalSTRS retirement benet will not be reduced by
these rules. Social Security is a federal program and neither
CalSTRS nor the State of California has control over eligibility
requirements or benet calculations.
See the Social Security, CalSTRS and You fact sheet at
CalSTRS.com/publications.
View the Introduction to Social Security video at
CalSTRS.com/videos.
Find details, including calculators, to help
you determine if these federal rules might
affect you at ssa.gov.
Social Security, CalSTRS and You
Get the facts on two federal rules that may affect you
As a California public school educator, you do not contribute to Social Security, so you will not
receive a Social Security benet for your CalSTRS-covered employment when you retire.
If you or a spouse paid into Social Security through non-CalSTRS covered employment, two federal
rules, the Windfall Elimination Provision and the Government Pension Offset, may be used in
the calculation of your Social Security benet. Social Security is a federal program, and neither
CalSTRS nor the State of California has control over eligibility requirements or benet calculations.
These rules affect only your Social Security benet. Your CalSTRS retirement benet will not change.
Windfall Elimination Provision
Affects your Social Security benet that is based
on your earnings from other employment.
• May reduce your Social Security benet, but it will
noteliminate it.
• Reduces the income replacement ratio covered
underthe rst component of the Social Security
benet formula, known as a bend point, to as low as
40%. If you paid Social Security taxes on substantial
earnings for:
» Up to 20 years—This provision reduces the 90%
factor of the Social Security computation formula
to40%.
» 21 to 29 years—The 40% factor increases
incrementally from 45% to 85%.
» 30 or more years—There is no reduction to your
Social Security benet.
Social Security substantial earnings
Social Security substantial earnings are dened
each year. Here is a sampling:
1980 $5,100
1990 $9,525
2000 $14,175
2010 $19,800
2020 $25,575
What does this mean for me?
Use the calculators at the Social Security
Administration’s Information for Government
Employees page to see how the formula will
affect you. Go toss a .g o v/gp o - we p for more
information, including links to calculators
that can provide personalized estimates.
0 $500 $1,000 $1,500
$2,000
(example)
$2,500 $3,000
0
$300
$600
$900
$1,200
$1,500
FIRST
BEND POINT:
$960
PLUS
32% of next amount
(up to $5,785)
$384
40% of $960
$717
$864
90% of $960
$1,197
SOCIAL SECURITY COVERED MONTHLY EARNINGS
SOCIAL SECURITY BENEFIT
TOTAL before WEP is applied
TOTAL when WEP is applied
The following example was created based on a member
turning 62 in 2020 with average Social Security-covered
earnings of$2,000.
Consider investing the percentage of your
salary that would have gone to Social
Security into a tax-advantaged 403(b) or
457(b) account, such as CalSTRS Pension2.
Use the worksheets on pages 23–24 to estimate your income and expenses in retirement.
Estimate your projected retirement benet using the calculator at CalSTRS.com/calculators.
According to the 19th Annual Transamerica Retirement Survey, nearly half of
workers say they “guessed” when asked how they estimated their retirement
savings needs. About one in four workers estimated the amount based on their
current living expenses, and only 12% have used a retirement calculator.
Are you saving enough?
12 CalSTRS 2020 • Member Kit
