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Your Smart Start Member Kit Early Career (CalSTRS)

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Publication: Early Career Member Kit
One-time death benet amount update (page 16)
Effective July 1, 2021, if a member dies during active service, the one-time death
benet is $6,480 under Coverage A and $25,920 under Coverage B. If a member
dies after retirement or while receiving a CalSTRS disability retirement, the one-time
death benet is $6,480.
Dear CalSTRS member,
As your retirement plan, CalSTRS is
dedicated to your secure nancial
future and helping you get there.
Your Smart Start Member Kit provides
a quick understanding of your dened
benet pension. As a vested member
of CalSTRS, you’re eligible to receive a
lifetime monthly benet when you retire,
regardless of how well the CalSTRS
Investment Portfolio performs.
Your income in retirement is a shared
responsibility between CalSTRS and
you. Your CalSTRS benet generally will
replace 50% to 60% of your nal salary.
If you think you’ll need more income
for your future, Pension2®, CalSTRS’
voluntary supplemental savings program
with 403(b) and 457(b) plans, can help ll
the gap. See pages 9–10 to learn more.
Every career depends on your valuable
work. Thank you for choosing education
as your career.
Sincerely,
Jack Ehnes
Chief Executive Ofcer
Our mission
Securing the nancial future and sustaining
the trust of California’s educators
THE BENEFIT OF A LIFETIME
YOUR SMART START MEMBER KIT
Early Career
2020
Will you have enough?
Start now, invest regularly and your
money can work for you.
1 Close your retirement income gap.
2 Give yourself a tax break.
3 Take advantage of Easy Choice
Portfolio investing.
4 Have more time to benet from the
power of compound interest.
5 Gain peace of mind for a more
secure nancial future.
See the Pension2 ebook at
Pension2.com to learn more.
Reasons why you should start a
403(b) or 457(b) account today
5
Your income in retirement is a shared responsibility
between CalSTRS and you.
Your CalSTRS lifetime monthly retirement benet is an excellent start. You’ll likely need more to
meet your retirement income goal. That’s why we created CalSTRS Pension2—an additional savings
plan. Learn about the advantages of Pension2’s low-cost 403(b) and 457(b) plans on pages 9–10.
Pull out your savings calculator
and see why it pays to start saving
sooner rather than later.
Flip to the side with the photo.
1
Find the age closest to your current age in the current age column.
2
Choose your monthly contribution—$100, $250, $500, $750 or $1,000.
3
See how much your account could be when you’re 65 if you start today—
then look across and see how much you could be missing out on if you
wait for even one year.
4
Know your benefits.
Find the handbook online at CalSTRS.com/publications.
CalSTRS Member Handbook
MEMBER HANDBOOK
Your Guide to CalSTRS Benets
2020
Why did you become a teacher?
We asked our early career members to tell us all the reasons they joined the education profession.
Active member survey respondents stated:
Source: 2019 CalSTRS Demographic Survey
69%
I wanted to make a difference
in the lives of students
27%
I have known my whole life I wanted
to be an educator
40%
I wanted to give back to
the community
25%
I liked the teaching schedule
39%
I had a teacher who
inspired me
14%
I came from a family of educators
Whatever your reason, we thank you!
8
Things to
do now
for your
smartstart
You’re helping students
build their futures,
don’t forget about yours.
Open Your Smart Start Member Kit
Know your retirement benet 4
Access your account information
on myCalSTRS
6
Learn the advantages of CalSTRS
Pension2 403(b) and 457(b) plans
Start your 403(b) or 457(b)
account today
9
11
Review your Retirement
Progress Report
13
Learn about your survivor benets 16
Attend a workshop 20
CalSTRS is governed by the Teachers’ Retirement Law, available at CalSTRS.com, and other governing laws. If there is a conflict between
the law and this booklet, the law prevails. CalSTRS makes reasonable effort to provide accurate information in its publications, but such
information is not meant to replace the law or provide legal or financial advice. To stay informed, consult a variety of sources, including
CalSTRS.com, the California State Legislative Counsel website at leginfo.legislature.ca.gov, your union and elected legislative representatives.
CalSTRS can provide you with information on your benefit choices but does not provide any legal, financial, tax or other advice. For such
advice, consider consulting a professional in the relevant field.
CalSTRS is here for you
The California State Teachers’ Retirement System is your retirement plan. For more than 100 years, we
have been prudently managing the dened benet pension funds of California’s public school educators.
CalSTRS is the largest educator-only pension fund in the world and the second largest public pension
fund in the U.S.
We provide you with retirement, disability and survivor benets, plus resources specic to your
careerstage:
• Publications such as Welcome to CalSTRS, the Member Handbook, Your Retirement Guide and
Working After Retirement.
• Financial awareness and benets planning workshops.
• Your annual Retirement Progress Report, available on myCalSTRS, which provides a summary of
your accounts and service credit.
• CalSTRS Pension2® low-cost traditional and Roth 403(b) and 457(b) plans for additional
retirement savings.
Why are we sending you a member kit?
The mission of CalSTRS—securing the nancial future and sustaining the trust of California’s
educators—drives everything we do. Your member kit explains CalSTRS benets and issues
fundamental to California educators, such as Social Security offsets and other policies that could
affect your secure nancial future. Sending member kits at key points in your career places essential
information at your ngertips right when you need it.
Now more than ever, it’s important for you to understand the value
and security of the CalSTRS dened benet you’re earning. Yet
when asked, most early career educators report they have a limited
understanding of their CalSTRS benets. For over 10 years, we have
rened this kit based on your feedback. We hope you enjoy your
member kit.
THE BENEFIT OF A LIFETIME
YOUR CALSTRS DEFINED BENEFIT PENSION MAY BE YOUR GREATEST ASSET.
TAKE A FEW MINUTES NOW TO LEARN MORE.
2 CalSTRS 2020 • Member Kit
Your CalSTRS retirement at a glance
As a vested member of CalSTRS, you’re entitled to a
guaranteed, lifetime monthly benefit when you retire.
If you’re like most educators, your retirement income will come
from four main sources:
• Your CalSTRS monthly retirement benet.
• Your CalSTRS Dened Benet Supplement account funds.
• Your investment savings, such as CalSTRS Pension2 403(b)
and 457(b) plans.
• Other personal savings.
Your income in retirement is a shared
responsibility between CalSTRS and
you. Your CalSTRS retirement benet
is a strong foundation, but you’ll likely
need more to meet your retirement
income goal.
CalSTRS administers a hybrid retirement system consisting of traditional
dened benet, cash balance and voluntary dened contribution plans:
Traditional defined benefit plan: Your CalSTRS
retirement benet is a dened benet pension that
provides a xed percentage of your nal compensation
based on the age you retire and your years of service
credit, not on how much you contribute or how
CalSTRS investments perform.
service credit x age factor x final compensation
Cash balance plan: Your CalSTRS Dened Benet
Supplement account is a cash balance plan.
A portion of your and your employer’s contributions
on earnings in excess of one year of service are
credited to your Dened Benet Supplement
account. All the funds in your account are yours
at retirement. See pages 6–7 to learn more.
Defined contribution plan: CalSTRS Pension2 offers
403(b), 457(b), Roth 403(b) and Roth 457(b) plans
for additional income in retirement. Contribute to your
tax-advantaged account through paycheck deductions.
The amount you have at retirement depends on
your contributions, investment gains or losses,
and expenses. See pages 9–10 to learn more.
CalSTRS 2020 • Member Kit 3
Know your retirement benefit
Your primary retirement benefit is based on a formula set by law:
service credit x age factor x final compensation
As a result of the California Public Employees’ Pension Reform Act of 2013, CalSTRS has two benet structures:
CalSTRS 2% at 60: Members rst hired to perform service that could be credited to the Dened Benet Program
on or before December 31, 2012, in addition to certain other members.
CalSTRS 2% at 62: Members rst hired to perform service that could be credited to the Dened Benet Program
on or after January 1, 2013.
The 2% refers to the percentage of your nal compensation that you’ll receive as a retirement benet for every year
of service credit, also known as the age factor. Other differences between the two benet structures include nal
compensation, normal retirement ages, creditable compensation caps and contribution rates.
Service credit
Service credit is the accumulated period of time,
in years and partial years, during which you receive
creditable compensation and make contributions to
the Dened Benet Program.
If you earn more than one year of service credit in a
school year by performing service such as outgrowth
assignments or working in multiple positions, most
of your and your employer’s contributions from the
additional service will go into your Dened Benet
Supplement account (see pages 6–7).
Final compensation
Final compensation is your highest average annual
compensation earnable for 36 consecutive months,
or your highest 12 consecutive months if you’re a
CalSTRS 2% at 60 member and have 25 or more
years of qualied service credit.
See the “Your retirement benet” section in the
Member Handbook.
View the Understanding the Formula video at
CalSTRS.com/videos.
Estimate your projected retirement benet using
the calculator at
CalSTRS.com/calculators.
Age factor
Your age factor is a percentage based on your age
on the last day of the month in which you retire.
The age factor is less if you retire at an earlier age
and is more if you retire at a later age.
CalSTRS 2% at 60 | Retirement age
55
1.40%
58
1.76%
61
2.13%
56
1.52%
59
1.88%
62
2.27%
57
1.64%
60
2.00%
63+
2.40%
CalSTRS 2% at 62 | Retirement age
55
1.16%
58
1.52%
61
1.88%
64
2.27%
56
1.28%
59
1.64%
62
2.00%
65+
2.40%
57
1.40%
60
1.76%
63
2.13%
For more detailed age factor tables,
see the Member Handbook.
4 CalSTRS 2020 • Member Kit
Contributions to your CalSTRS retirement
CalSTRS pays benets using a combination of
investment income and member, employer and
state contributions.
Your member contributions
CalSTRS 2% at 60 members: You contribute
10.25% of your Dened Benet creditable earnings
tohelp nance your retirement benet.
CalSTRS 2% at 62 members: Your contribution
rate is connected with the normal cost of your
retirement benets assessed each year based on
the actuarial valuation—the snapshot of CalSTRS’
nancial status presented to the Teachers’
Retirement Board each spring. For 2020–21, your
contribution rate is10.205%.
Employer and state contributions
Employer and state contribution rates vary year to
year and are deposited in the Teachers’ Retirement
Fund to help pay benets for all members and
their beneciaries.
Ination protection
Your retirement benet is protected against rising
prices in two ways:
1
Starting September 1 after the rst anniversary
of your retirement date, your benet increases
automatically each year by 2% of your
initial benet.
2
If ination erodes the purchasing power of your
retirement benet, you’ll receive an additional
quarterly payment subject to the availability of
funds set aside for purchasing power protection.
The purchasing power protection level is
currently set at 85% of your initial benet.
Your retirement benefit—Your options
The highest retirement benet you can receive
is the Member-Only Benet. The Member-Only
Benet stops with your death. Or you can choose
to provide a lifetime monthly benet to someone
upon your death. If you choose to do so, your
benet will be reduced based on your age and
your beneciary’s age at the time you elect an
option, and the option you elect.
View the Beneciary Options video at
CalSTRS.com/videos.
Securing your nancial future
Your CalSTRS dened benet plan is likely the
cornerstone of your retirement savings. Since
it’s set by a formula, not by the amount of
contributions you make, it’s structured to shield
you from the risks of investment. In addition to
receiving monthly income for the rest of your
life, you also have access to disability benets
while working and to survivor benets to provide
nancially for your loved ones.
CalSTRS 2020 • Member Kit 5
Are you registered?
myCalSTRS offers easy, secure and convenient access to your accounts and CalSTRS forms—anytime,
anywhere. Register at myCalSTRS.com.
With myCalSTRS, you can:
1
2
3
4
Update your contact information. 5
6
7
Exchange secure messages with
CalSTRS representatives.
Access your annual Retirement Progress Report
and view information reported by your employer. Complete and submit forms.
Name and update your one-time death Easily access your CalSTRS Pension2 403(b)
benet recipient. or 457(b) account, if you have one.
View your account balances.
Need help registering?
View the self-paced, interactive online registration guide at myCalSTRS.com.
You’ll nd help with resetting your password at CalSTRS.com/myCalSTRS-help-videos.
Your Defined Benefit Supplement account—
Additional money for retirement
As a Dened Benet Program member, you have a Dened Benet Supplement account that
provides additional savings for your retirement.
Your Dened Benet account contains your member
contributions for up to one year of service performed
in a school year. Contributions on your earnings in
excess of one year of service are credited to your
Dened Benet Supplement account. If you’re a
CalSTRS 2% at 60 member, your contributions on
limited-term payments are also credited to your
Dened Benet Supplement account.
Your Dened Benet Supplement account balance
earns a guaranteed interest rate. For 2020–21, the
rate is 2.44%. When you retire, you’ll receive the
funds in your Dened Benet Supplement account.
Your benets are paid as either a lump sum or an
annuity equal to the total balance of your account.
Contributions to your Dened Benet Supplement
account don’t affect your ability to make contributions
to 403(b), 457(b) or similar tax-advantaged accounts.
Find your current Dened Benet Supplement
account balance on your Retirement
Progress Report, available online in your
myCalSTRS account.
6 CalSTRS 2020 • Member Kit
-
-
Excess contributions
If you make contributions on earnings in excess of
one year of service, you’re eligible for a return of
your contributions that exceed the contribution rate
for compensation creditable to your Dened Benet
Supplement account—8% for CalSTRS 2% at 60
members and 9% for CalSTRS 2% at 62 members.
The dollar value of those excess contributions is
reported on your Retirement Progress Report. Your
myCalSTRS account shows a breakdown of excess
contributions by employer.
Your employer is responsible for returning your excess
member contributions to you, less any authorized
adjustments or tax withholding. If you have questions
regarding the return of your excess contributions,
contact your employer.
View the Dened Benet Supplement Program
video series at
CalSTRS.com/videos.
Dened Benet Supplement account excess contributions example
Gabriel is a CalSTRS 2% at 62 member who
earned $60,000 teaching English at a high school
in Northern California. He also taught summer
school, where he earned $5,000 at a lower pay
rate than his regular full time assignment. This
extra pay activity was in addition to the one year of
service credit he earned teaching during the regular
school year.
Gabriel’s member contribution rate to the Dened
Benet Program is 10.205%. His employer
deducted this amount from his salary. At the end
of the school year, CalSTRS determined $5,000 of
Gabriel’s earnings was for excess service earned
by teaching summer school, the contribution for
which was then credited to his Dened Benet
Supplement account.
Gabriel earned a year of service credit from his regular
teaching assignment to be used to determine his lifetime
benet under the Dened Benet Program.
Excess contributions
CalSTRS returned excess contributions to Gabriel's employer;
then his employer returned Gabriel's portion to him.
Defined Benefit Supplement account
Following the end of the scal year, CalSTRS credited the
equivalent of 9% of Gabriel’s summer school compensation to
his Dened Benet Supplement account on behalf of Gabriel
and an additional 8% to his Dened Benet Supplement
account on behalf of his employer.
Defined Benefit Program
Since the contribution rate for compensation
credited to the Dened Benet Program (regular
teaching assignment) is higher than the contribution
rate for compensation credited to the Dened
Benet Supplement Program (summer school
assignment), both Gabriel and his employer are
eligible for a return of their excess contributions.
If you perform excess service, CalSTRS
will return excess contributions to your
employer in the fall. Your employer is
responsible for returning those funds to you.
CalSTRS 2020 • Member Kit 7
Ways to increase service credit
The more service credit you have at retirement,
the greater your CalSTRS monthly benefit.
Transfer unused sick leave if you
change districts
You may buy service credit for:
• Eligible leave, including maternity, paternity and
When you service retire, CalSTRS will
sabbatical leave and leave approved under the
convert your unused sick leave to additional
federal Family and Medical Leave Act and the
service credit using the information your
California Family Rights Act.
employer provides.
• Eligible service in out-of-state or foreign public
schools, the military, Peace Corps or Job Corps.
If you change employers during your career,
be sure to coordinate with your former
• Nonmember service for part-time or
employer to arrange for the transfer of your
substitute work performed before you were a
accumulated unused sick leave to your
CalSTRS member.
new employer.
• Redeposits of previously refunded contributions,
plus interest, after returning to CalSTRS-covered
employment or if you’re a member of another
eligible California public retirement system.
It costs less to buy service credit earlier
View the Purchasing Service Credit video at
in your career than later.
CalSTRS.com/videos or see the fact sheet
and booklet at
CalSTRS.com/publications.
Your CalSTRS retirement benefit is a healthy start—
Will it be enough?
On average, the CalSTRS retirement benet replaces 50% to 60% of a career educator’s salary. You’ll need to
close any gap between your retirement income goal and your retirement benet with savings and investments.
The CalSTRS Pension2 personal wealth plan is a good place to start. See pages 9–10 to learn more.
Invest sooner rather than later.
Your savings and investments,
That’s the top recommendation
such as a Pension2 403(b)
Your CalSTRS retirement
from a poll of California
or 457(b) account, and your
CalSTRS Dened Benet
educators ages 40 to 49 when
Supplement funds
asked what advice they would
give their younger colleagues.
View The Gap video at CalSTRS.com/videos.
8 CalSTRS 2020 • Member Kit
-
Learn the advantages of CalSTRS Pension2
403(b) and 457(b) plans
You’re already off to a great start with your CalSTRS retirement benet. Next, you’ll likely need personal
savings. Pension2, the CalSTRS voluntary supplemental savings plan, offers low cost, exible 403(b), 457(b),
Roth 403(b) and Roth 457(b) plans. Pension2 is designed to ll the gap between your CalSTRS retirement
benet and your retirement income goal.
Designed with your interests in mind
With Pension2, you’ll belong to a plan with: » Core Investment Options—Build your own
portfolio from a list of more than 20 funds.
• Low and transparent costs—no commissions, no
load fees and no surrender charges. » Self-Directed Brokerage Account—Access
a greatly expanded range of mutual funds.
• Flexible investment choices that match all levels
of investment ability: • Professional advice, services and retirement
income planning tools.
» Easy Choice Portfolios—Consider your risk
tolerance and retirement date, with a mix of
the core investment options.
Pension2 can take you
where you want to go
You can save a little or a lot—and you can
change your contribution amount any time.
See the Pension2 ebook and enroll online at
Pension2.com or call toll free 888-394-2060.
CalSTRS 2019 • Member Kit 9
A little now can really add up later
Let’s say you contribute $100 a month to your account directly from your paycheck. If your account
averages a 5% rate of return annually, after 20 years you could have $41,103. If you increase your monthly
contribution to $300 a month, your savings could grow to $123,310.
+
An added benefit of tax-deferred contributions: Your $300 investment may reduce your paycheck by
only $173.
$300 every month
$123,310
$100 every month
$80,187
$46,585
$41,103
$20,402
$15,528
$26,729
$6,800
5 years 10 years 15 years 20 years
These hypothetical illustrations assume a combined 37% state and federal tax rate. They are not meant to represent the performance of any
investment product and should not be used to predict investment performance. Any taxes and expenses associated with an actual investment
are not reected. While taxes are paid when funds are withdrawn, investors are often in a lower tax bracket at retirement. CalSTRS Pension2
does not guarantee any rate of return on investments. Investing involves risk, including risk of loss of principal.
Now:
1
2
3
Start your Pension2 account
You’ve done your research and selected your plan.
Enroll online at Pension2.com or call
888-394-2060.
Determine how much you want to invest.
Fill out your district’s salary reduction agreement
form, available from your payroll ofce or online
at
403bCompare.com (select Find Employer).
10 CalSTRS 2020 • Member Kit
Start your 403(b) or 457(b) account today
We get it. Retirement is probably one of the last things on your mind.
And since you’re busy, we’re making it easy for your future to start now.
Find the right 403(b) or 457(b) for you
Most likely, your school district offers dozens
of supplemental savings products and
hundreds of investment options to choose
from. It can be somewhat overwhelming to
decide which plan to choose.
403bCompare helps you nd the 403(b)
or 457(b) account that ts your needs.
You can easily compare fees, services and
performance of all the plans your district
offers. Once you select the plan you want,
your personal retirement savings will start
growing with easy paycheck contributions.
Check out 403bCompare.com today.
Why start now? It’s smart!
Power of time and money. With compound
interest, you earn interest on your total
balance—your original contribution plus
all interest earned and any additional
contributions—so your money can grow faster.
Tax advantages. When you contribute to
your 403(b) or 457(b) account directly out of
your paycheck, you defer taxes on the money
you invest each month. Your earnings grow
tax-deferred, and your monthly taxable income
is lower. Contribute to a Roth 403(b) or Roth
457(b) account through your paycheck and
you won’t get a tax break up front, but your
contributions and earnings will be tax-free at
retirement when you withdraw your funds.
More time to take risks. The earlier you start,
the longer you’ll be able to weather nancial
downturns and reap the benets of strong
economic times—and the longer you can take
advantage of compound interest.
Investing involves risk, including risk of loss
of principal.
Did you know you can start a 403(b) or 457(b) account with as little as $25 a month?
CalSTRS 2020 • Member Kit 11
5 questions to ask before investing
Whether you’re opening an account to invest for the long term or save for the short term,
it’s important to make sure the opportunity is right for you.
1
2
3
What is my tolerance for risk?
All investments have risk. Before you invest,
know your risk prole. CalSTRS Pension2 Easy
Choice Portfolios provide a ready-made mix of
the Pension2 core investments for specic time
horizons and risk tolerances.
What is my timeline?
Your timeline is made up of the years that
represent your nancial life. Most of your timeline
will be spent saving and building your savings, and
the last part withdrawing and living off that money.
Do I understand it?
If you don’t understand how an investment works,
you can’t properly assess whether it matches your
overall goals, risk tolerance and timeline. Take
the time to nd the investment that best meets
your needs.
4
What are the fees, expenses and
commissions?
Most investments charge fees and expenses.
Returns are never guaranteed, but fees, expenses
and commissions are. Check the investment
prospectus and ask nancial professionals how they
are paid. Compare costs of 403(b) plans offered in
your district at
403bCompare.com.
5
How easily can I pull my money out?
Some 403(b) annuity investments require you to
stay invested for a set period of time and charge
penalties if you pull your money out early. Know your
options before you decide.
Want to learn more? Our team can help you
determine your investment timeline and risk
tolerance. Call Pension2 at 888-394-2060.
Your retirement income gap
How much money will you have to enjoy the future you want?
My goal is to retire with % of my working income.
1. My retirement goal
According to nancial professionals, you may need 80–90% of your salary to
maintain your current standard of living in retirement.
%
2. Calculate my gap
Service credit
%
Age factor % of nal compensation
% %
My goal
% of nal compensation
My gap
Your percentage of nal compensation will be less if you choose to elect an option benet.
12 CalSTRS 2020 • Member Kit
Review your Retirement Progress Report
Keep tabs on your CalSTRS account and service credit balances by reviewing your Retirement Progress
Report each year. Your report is posted online on myCalSTRS annually in mid-September.
Your Retirement Progress Report summarizes:
• Your service credit.
• The name of your one-time death benet recipient.
• Accumulated contributions and interest in your Dened Benet
and Dened Benet Supplement accounts.
• Information about your disability and survivor benet coverage.
While working, be sure to:
• Verify your paycheck information, including your deductions,
each pay period.
• Keep your mailing and email addresses current with
your employer and CalSTRS. Visit myCalSTRS.com to
update your CalSTRS information.
View your Retirement Progress Report at myCalSTRS.com.
If you believe there’s a
discrepancy in your report,
correct errors by contacting
your employer immediately.
CalSTRS 2020 • Member Kit 13
As a California public school educator, you do not contribute to
Social Security, so you will not receive a Social Security benet
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 benet. Social Security is a federal program, and neither
Windfall Elimination Provision
Affects your Social Security benet that is based
on your earnings from other emplo
The following example w
yment.
• May reduce your Social Security benet,
noteliminate it.
but it will
• Reduces the income replacement ratio co
underthe rst component of the Social Security
benet formula, known as a bend point,
vered
40%. If you paid Social Security taxes on substantial
earnings for:
to as low as
» Up to 20 years—This provision reduces the 90%
factor of the Social Security computation for
to40%.
mula
» 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 benet.
turning 62 in 2020 with a
earnings of$2,000.
as created based on a member
verage Social Security-covered
Check
You know the cost of a cup of coffee,
Your Money
a movie ticket and your monthly rent
or mortgage, but how about your total
monthly expenses?
Use the worksheet on pages 22 and 23
to help you nd more money for your
future goals.
IQ
Get the facts on Social Security
for your CalSTRS-covered employment when you retire.
If you or a spouse paid into Social Security through
nonCalSTRS-covered employment, two federal rules—
the Windfall Elimination Provision and the Government
Pension Offset—may be used in the calculation of your
Social Security benet. The application of these offsets
may leave you with a smaller Social Security benet or
possibly no Social Security benet at all.
Your CalSTRS retirement benet 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 benet calculations.
See the Social Security, CalSTRS and You fact sheet
at
CalSTRS.com/publications.
CalSTRS nor the State of California has control over eligibility requirements or benet calculations.
These rules affect only your Social Security benet. Your CalSTRS retirement benet will not change.
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 benet for your CalSTRS-covered employment when you retire.
Social Security substantial earnings
Social Security substantial earnings are dened
each year. Here is a sampling:
1980
View the Introduction to Social Security video at
CalSTRS.com/videos.
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.
1990
2000
2010
2020
$5,100
$9,525
$14,175
$19,800
$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 tossa.gov/gpo-wep 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
14 CalSTRS 2020 • Member Kit
—
-
What if you leave education?
You can keep your money with CalSTRS if you leave education or you can request a refund. A refund
includes the total balance of your own Dened Benet Program contributions and interest, and a
distribution of the total balance of your Dened Benet Supplement account. You cannot withdraw
employer contributions that were made to the Dened Benet Program. Even if you think you may not
return to public education, taking a refund may not be the best nancial option.
+
Benefits of leaving your contributions
with CalSTRS:
• You’ll keep your service credit.
• Your accounts will continue to accrue interest.
• You’ll be eligible for a monthly retirement
benet when you’re age 55 if you have at
least ve years of service credit or less if
under the special circumstances of concurrent
retirement with certain California public
retirement systems.
View the Refund: Consider the Consequences
video at
CalSTRS.com/videos or the fact sheet
at
CalSTRS.com/publications.
–
Consequences of cashing out include:
• You’ll no longer be a member of CalSTRS.
• You'll give up all rights to your retirement
benet, as well as survivor and disability
benets, unless you return to CalSTRS
covered employment.
• Your refund may be subject to additional
federal and state taxes if you take your
refund before age 59½ and do not roll over
your funds to a qualied retirement plan.
• If you take a refund, it’s expensive if you
return to public education and want to
redeposit your service credit.
What if I’m a member of another retirement system?
If you’re a member of CalSTRS and certain other eligible
California public retirement systems, you may be able to
service retire concurrently and:
• Qualify for a CalSTRS service retirement benet at
age 55 or older with less than ve years of CalSTRS
service credit.
• Increase your CalSTRS service retirement by using
higher salaries from another public retirement system
for your nal compensation.
See the Concurrent Retirement fact sheet at
CalSTRS.com/publications.
CalSTRS 2020 • Member Kit 15
POP
Quiz
POP
Quiz
When are you
eligible to retire?
You can retire at age 55 with
ve years of service credit—
or fewer if you service retire
concurrently from one or
more eligible California public
retirement systems. If you’re
a CalSTRS 2% at 60 member,
you can retire as early as
age 50 if you have at least
30 years of service credit.
Are you a member of another
California public retirement
system? See the Concurrent
Retirement fact sheet at
CalSTRS.com/publications
to learn more.
Your survivor benefits
Your spouse, children and other loved ones may be eligible
for survivor benets after your death. The type and amount of
benets depend on:
• Your years of service credit.
• Your type of coverage: A or B.
Find your coverage on your Retirement Progress Report.
• Your membership status.
• If you elect an option.
Depending on your member status at the time of your death,
your beneciaries may be eligible for three types of benets:
• One-time death benet.
• Dened Benet Program monthly benet.
• Dened Benet Supplement account distribution.
NOTE: All survivor benets are considered taxable income.
One-time death benefit recipient
You may designate one or more recipients to receive a
one-time death benet—a person, trust, estate, charitable
organization, corporation or public entity. If you die during
active service, the benet is currently $6,372 under
Coverage A and $25,488 under Coverage B. If you die after
you’ve retired or while receiving a CalSTRS disability benet,
the benet amount is currently $6,372.
Name your one-time death benet recipient using myCalSTRS.
Then be sure to keep your recipient information current.
Defined Benefit Program monthly benefit
If you die before retirement, your survivors, including your
spouse or registered domestic partner and dependent
children, may be eligible for a monthly survivor benet.
You may choose to elect an option to provide a lifetime
monthly benet to one or more beneciaries instead of a
monthly survivor benet when you’re eligible to retire, under
Coverage B disability retirement or at retirement.
16 CalSTRS 2020 • Member Kit
Defined Benefit Supplement distribution
Your membership status when you die determines
how the balance in your Dened Benet Supplement
account will be distributed.
If you die before retirement, your Dened Benet
Supplement account balance will be distributed to
your one-time death benet recipient. If you did not
name a recipient, CalSTRS will pay the balance to
your estate.
If you die after retirement, your account balance will
be distributed to your one-time death benet recipient
or option beneciary, depending on the distribution
you elected at retirement.
See the Survivor Benets brochure at
CalSTRS.com/publications.
View the Survivor Benets video at
CalSTRS.com/videos.
Your disability benets
You may be eligible for disability benets if you
have a medically determined physical or mental
impairment that is permanent or expected to last
at least 12 consecutive months and prevents you
from performing:
• Your usual duties with or without reasonable
accommodation.
OR
• Duties in a comparable level position.
In general, the basic disability benet is 50% of your
nal compensation. The maximum benet, including
benets for eligible dependent children, is 90% of your
nal compensation.
In order to have income while your application for
disability benets is being evaluated, you may
apply while:
• You're still working.
• You're receiving sick leave or differential pay.
In addition, if you’re eligible to service retire, you can
apply for service retirement during the evaluation
of your application. However, if your disability
benets application isn’t approved, you’ll remain in
service retirement and won’t be eligible to apply for
disability again.
Your disability benet does not require your disability to
be work related, unlike workers’ compensation benets.
See the “Your disability benets” section in the
Member Handbook and Your Disability Benets
Guide at
CalSTRS.com/publications.
CalSTRS 2020 • Member Kit 17
CalSTRS Is
Keep your address current
Be sure CalSTRS has your current mailing and
email addresses, so you receive all important
communications from us.
Moved or planning a move soon?
Three ways to update your contact information:
myCalSTRS makes it easy. From the homepage,
select Update Your Profle, then follow the instructions.
If you’re not yet registered, complete the registration
process today to activate your account.
myCalSTRS.com
Complete the Address Change Request form,
then sign, date and mail it to us.
CalSTRS.com/forms
Call us at 800-228-5453. To use this option, you
must have a valid email address.
For your security, when you update your mailing
or email address, we will send you a letter and an
email conrming the update.
Connect with us on social media
It's a great way to keep up on the latest
CalSTRS news, share ideas and connect with
other educators. Invite your colleagues to join
us, too.
CalSTRS.com/stay-connected
Mobile Friendly
18 CalSTRS 2020 • Member Kit
Our member service centers
CalSTRS has member service centers located throughout
the state. Go to
CalSTRS.com/benefits-planning to see
services currently available online or in your area.
To nd out more, call 800-228-5453, option 3, or visit
CalSTRS.com/localoffices.
View our member benefit videos
Browse our library of three- to ve-minute member education videos.
Welcome to CalSTRS
Learn more about your benets and steps you can take now for your secure future.
The Gap
Consider how much of your working salary you’ll need to live the retirement you want.
Refund—Consider the Consequences
Understand the consequences of taking a refund if you leave teaching.
CalSTRS.com/videos
Stay engaged
Read our Connections newsletter, which provides information
about benets, retirement planning, workshops, webinars,
legislative news and more.
Go paperless. Sign up on myCalSTRS to receive your
newsletter electronically to help us conserve natural
resources and reduce costs.
CalSTRS 2020 • Member Kit 19
Attend a workshop
Want to learn more about your benets as a CalSTRS member? How to save, plan and protect
your nancial future? Take advantage of our retirement and nancial awareness workshops.
My Retirement workshops
The My Retirement interactive workshop series shows you how to make the most of your CalSTRS membership.
My Retirement System—Introduces your retirement, survivor and disability benets, how to calculate your
retirement benet, and why it pays to start a 403(b) or 457(b) supplemental savings plan sooner rather than later.
My Retirement Benefits—Provides more in-depth information about your benets, earned and purchased service
credit, and the gap between your CalSTRS benet and your retirement income goal and ways you can bridge it.
My Retirement Decisions—Covers the decisions you’ll need to make before you retire, including if you want to
elect a beneciary option, how to complete the application and what you’ll need to know after retirement.
Sign up at CalSTRS.com/benefits-planning.
Financial awareness workshops
Learn how to make smart decisions today about your
nancial future. You’ll take home a booklet of helpful
checklists and worksheets after attending each of our
three nancial awareness workshops.
Save for Your Future—Discover ways to create a spending
plan, understand your credit score and credit report,
build and keep good credit, and manage debt.
Plan for Your Future—Create an action plan for your
retirement, estimate your income and expenses in
retirement and learn about Medicare basics and Social
Security offsets.
Protect Your Future—Learn how to maximize and protect
your income and reduce the risk of underestimating your
expenses, and how to choose a nancial professional.
Register now at CalSTRS.com/financial-awareness.
CalSTRS representatives are available by secure
online messaging at
myCalSTRS.com and by phone
at 800-228-5453, option 3.
20 CalSTRS 2020 • Member Kit
Create your monthly spending plan
Start by writing down all your purchases every day for two weeks to understand your spending habits.
You’ll get a good idea of how many times you eat out, and how many coffees and other items you buy.
Be sure to include them along with your regular household expenses, including rent or mortgage,
utilities and groceries.
Give it a try!
Complete your monthly spending plan worksheet
on the next page. Then, take a look at your results
each month.
Do you still have money left after all your
expenses and regular savings? If so, consider
putting some or all of that extra money into your
403(b) or 457(b) account. If you have credit card
debt or a student loan, consider increasing your
monthly payments to pay down your debt faster.
Are you spending more than you take in?
Consider adjusting your expenses. Look rst at
your discretionary spending, or your wants, and
ndsmall ways to save.
Are you not meeting your Must-haves and your
Wants? Think about adjusting your expectations
or look into supplementing your income by taking
on an extra-pay assignment.
What are your savings goals? Start with your
short-term goals—saving for a vacation, new
car or wedding? How about your long-term goals
like saving for retirement or a down payment for
a home? Write down your goals, prioritize them,
then keep track of your progress.
Make sure you cover all expenses. If your
expenses vary from month to month, track your
spending over three months.
CalSTRS 2020 • Member Kit 21
Try a budget app to manage
your spending habits.
Your monthly spending plan worksheet
Use this worksheet to track your household income and expenses for one month. For each expense, jot down
what you estimate you spend in the Estimate column, then write down what you actually spent in the Actual
column. Next, calculate the difference between your estimated and actual expenses in the Difference column.
Finally, determine if the expense is a Must-have or Want.
Income
Actual
Monthly pay (after taxes)
Child support or alimony
Interest
Other
Other
Total monthly income
Budget for the month of
Expenses
Estimate Actual Difference
Must-have or Want
Home
Mortgage/rent
Second mortgage
Property taxes
Homeowner’s or renter’s insurance
Association dues
Repair/maintenance
Other
Total home expenses
Utilities
Electric/gas
Water/sewer
Phone
Other
Total utilities expenses
Food and household items
Groceries and household items
Dining out
Coffee
Other
Total food and household expenses
Transportation
Car payment 1
Car payment 2
Gas/public transportation
Car insurance
Repairs/maintenance
Other
Total transportation expenses
Health and grooming
Health insurance
Prescription medication
Gym/health club
Grooming (hair, nails)
Other
Total health and grooming expenses
22 CalSTRS 2020 • Member Kit
0
Expenses
Estimate Actual Difference
Must-have or Want
Family and pets
Childcare and babysitting
Child support or alimony
Allowances
Tuition and fees
Pet food, supplies, veterinarian
Other
Total family and pet expenses
Entertainment and recreation
Cable TV, internet, streaming services
Movies, concerts, other events
Newspapers, magazines, books
Clubs, sports, hobbies
Vacations
Other
Total entertainment and recreation expenses
Debt
Credit card 1
Credit card 2
Credit card 3
Student loan 1
Student loan 2
Personal loan
Other
Other
Other
Other
Total debt expenses
Savings and investing
Emergency savings
Education savings
Retirement [403(b), 457(b), IRA]
Short-term goal 1
Short-term goal 2
Short-term goal 3
Long-term goal 1
Long-term goal 2
Long-term goal 3
Other
Total savings and investing expenses
Miscellaneous
Gifts (family, friends)
Donations (church, charities)
Other
Total miscellaneous expenses
Now that you have a spending plan, you have a realistic idea of your monthly income and expenses.
To gure out your net income, simply subtract your monthly expenses from your monthly income.
-
=
Monthly income Monthly expenses Net income
CalSTRS 2020 • Member Kit 23
Important documents
WEB
CalSTRS.com
Click Contact Us to email
myCalSTRS.com
403bCompare.com
Pension2.com
STAY CONNECTED
CALL
800-228-5453
7 a.m. to 6 p.m.
Monday through Friday
916-414-1099
Calls from outside the U.S.
888-394-2060
CalSTRS Pension2® personal wealth plan
855-844-2468 (toll free)
Pension Abuse Reporting Hotline
WRITE
CalSTRS
P.O. Box 15275
Sacramento, CA
95851-0275
VISIT
Member Services
100 Waterfront Place
West Sacramento, CA 95605
Find your nearest
CalSTRS ofce at
CalSTRS.com/localofces
FAX
916-414-5040
CalSTRS resources
California State Teachers’ Retirement System
COM 1766 (rev 6/20)
Printed on recycled paper
CalSTRS benefits planning offices
Member service centers
Location Telephone number Hours
Fresno Redding* Santa Clara
800-228-5453 ext. 3 M–F 8–5Glendale Riverside West Sacramento
Irvine San Diego
Hours and services vary at satellite offices, so call ahead or visit CalSTRS.com/localoffices for more information.
For the most current listing of our member service centers and satellite offices, visit CalSTRS.com/member-service-centers.
* Standard hours of operation may not apply to this location.
Satellite ofces
Location Telephone number
Bakerseld Eureka Murrieta Salinas Santa Maria
800-228-5453 ext. 3
Ceres Hanford Ontario San Francisco Santa Rosa
Cordelia Hayward Oxnard San Marcos Visalia
Culver City Hesperia Palm Desert San Mateo Walnut
Downey Lancaster Palm Springs Santa Barbara
El Centro Los Alamitos Pleasant Hill Santa Cruz
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