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Your Smart Target Member Kit Midcareer (CalSTRS)

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Publication: Midcareer Member Kit
One-time death benet amount update (page 14)
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.
THE BENEFIT OF A LIFETIME
YOUR SMART TARGET MEMBER KIT
Midcareer
2020
Know your benefits.
Find the handbook online
at CalSTRS.com/publications.
CalSTRS Member Handbook
Dear CalSTRS member,
As your retirement plan, CalSTRS is dedicated
to your secure nancial future and helping you
get there. In our 2019 Member Demographic
Survey, 88% of respondents indicated they
plan to continue to work in California public
education until they retire. This is great news
since the length of service is one of the
factors that enhance retirement benets.
Your income in retirement is a shared
responsibility between CalSTRS and you.
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 CalSTRS benet generally will replace
50% to 60% of your nal salary. How much will
you need for your future? Pension2®, CalSTRS’
voluntary supplemental savings plan, can
help ll the gap. See page 10 to learn more.
We invite you to take a few minutes
now to look through your kit.
Also be sure to check out benets and
nancial awareness workshops and
videos online at CalSTRS.com.
Thank you for choosing education for
your career.
Sincerely,
Jack Ehnes
Chief Executive Ofcer
Keep your address current
Be sure we have your current mailing and email addresses
so you don’t miss important communications from us.
Our mission
Securing the nancial future and sustaining the trust
of California’s educators
Moved or planning a move soon?
Three ways to update your contact information:
2. Complete the Address Change Request form, sign, date
and mail it to us.
CalSTRS.com/forms
1. myCalSTRS makes it easy. From the home page, select Update Your
Profile, then follow the instructions. Not yet registered for myCalSTRS?
Complete the registration process today to activate your account.
myCalSTRS.com
3. Call us at 800-228-5453. To use this option, you must have a
valid email address. Best times to call are early morning and
late afternoon on Wednesday, Thursday and Friday.
MEMBER HANDBOOK
Your Guide to CalSTRS Benets
2020
For your security, when you update your mailing or email address,
we will send you a letter and an email conrming the update.
Source: CalSTRS 2019 Member Demographic Survey
88%
yes
3%
no
9%
undecided
Percentage of active member respondents
who plan to stay in California public
education until they retire.
Increase your retirement benet 9
Increase your 403(b)
or 457(b) contribution 11
Attend a workshop 20
Understand your
retirement decisions 16
Estimate your retirement benet 4
Open Your Smart Target Member Kit
Review your Retirement
Progress Report 12
Access your account information
on myCalSTRS 2
Get the facts on Social Security 13
Learn about your survivor benets 14
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.
10
Things to
do now
for your
smarttarget
You’re helping students
build their futures, don’t
forget about yours.
CalSTRS 2020 • Member Kit 1
myCalSTRS offers easy, secure and convenient access to your accounts and forms—anytime, anywhere. Register
at myCalSTRS.com.
With myCalSTRS, you can:
1 Update your contact information.
2 Access your annual Retirement Progress Report
and view information reported by your employer.
3 View your account balances.
4 Name and update your one-time death
benet recipient.
5 Exchange secure messages with
CalSTRS representatives.
6 Complete and submit forms.
7 Link to your CalSTRS Pension2 403(b)
or 457(b) account, if you have one.
Access your CalSTRS information online
DID
YOU
KNOW
?
?
You have survivor benefits.
Have you designated your one-time death benefit recipient yet?
You may name one or more recipients for the one-time death benet—
a person, trust, charity, estate, parochial institution, corporation or public
entity—and you can change your recipient at any time, with no nancial penalty.
Use your myCalSTRS account or the Recipient Designation form, available at
CalSTRS.com/forms, to designate or update your recipient information.
See page 14 to learn more.
Why are we sending you a member kit?
The mission of the California State Teachers’ Retirement System—
securing the nancial future and sustaining the trust of California’s
educators—drives everything we do. Your member kit explains CalSTRS
benets and other issues fundamental to California’s 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 midcareer 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. LOOK THROUGH THIS BOOKLET
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.
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 7–8 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 page 10 to learn more.
service credit x age factor x final compensation
CalSTRS 2020 • Member Kit 3
Estimate your retirement benefit
How much will your benefit be each month? Your primary retirement benet is based on a formula set by law:
service credit x age factor x final compensation = your retirement benefit
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 7–8).
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.
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%
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. See
the age factor tables in the Member Handbook for
more information.
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%
4 CalSTRS 2020 • Member Kit
Let’s look at Faye:
Faye, a CalSTRS 2% at 60 member, is a rst-grade teacher with 29 years of service credit. She just turned
58, and though not in a hurry to retire, she’s been thinking more about retirement lately. Her gross monthly
salary is $5,708.
Here are three examples for her Member-Only retirement benet calculation, not including any unused sick
leave she may have that will be converted to service credit at retirement. The examples assume her pay
stays the same and she doesn’t elect an option to provide a lifetime benet to someone upon her death.
If Faye retires with at least 30 years of service credit, a 0.2% career factor will be added to her age factor,
up to a maximum age factor of 2.4%.
See the career factor and age factor tables in the Member Handbook at CalSTRS.com/publications.
service credit x age factor x final compensation
If she continues working until her 62nd birthday, she would be eligible for the maximum
combined age factor and career factor of 2.4%, giving her a monthly retirement benet of:
33 x 2.4% x $5,708 = $4,521
service credit age factor
+
career factor
nal compensation retirement benet
Your retirement formula: How it works
Example 1
If Faye were to retire today, her monthly retirement benet would be:
29 x 1.76% x $5,708 = $2,913
service credit age factor nal compensation retirement benet
If she continues working until her 60th birthday, she would qualify for the career factor.
Her monthly retirement benet would be:
31 x 2.2% x $5,708 = $3,893
service credit age factor
+
career factor
nal compensation retirement benet
Example 2
Example 3
CalSTRS 2% at 62 members: There is no career factor benet enhancement to the age factor.
CalSTRS 2020 • Member Kit 5
Contributions to your CalSTRS
retirement
CalSTRS pays retirement benets using a
combination of investment income and 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.
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.
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, such as CalSTRS Pension2.
See pages 10–11 to learn more.
Your CalSTRS retirement benet—Will it be enough?
Your savings and investments and your
CalSTRS Dened Benet Supplement funds
Your CalSTRS retirement
6 CalSTRS 2020 • Member Kit
If you’re among the more than 80%
of CalSTRS members who have
performed additional service beyond
their regular full-time assignment,
you’re already building your Dened
Benet Supplement balance. Last
year, over 60% of our members
increased their Dened Benet
Supplement account balances by
earning excess service credit.
Your Defined Benefit Supplement account—
Additional money for retirement
Your Dened Benet account contains your member
contributions for up to one year of service performed
in a school year. Any 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 account balance on your Retirement
Progress Report at myCalSTRS.com.
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 each year 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.
As a Dened Benet Program member, you have a Dened Benet Supplement account that provides
additional savings for your retirement.
CalSTRS 2020 • Member Kit 7
Gabriel is a CalSTRS 2% at 60 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 10.25%. 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.
Since the contribution rate for the compensation
credited to the Dened Benet Program (regular
teaching assignment) is higher than the contribution
rate for the 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.
Dened Benet Supplement account excess contributions example
Defined Benefit Program
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 8% 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.
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.
8 CalSTRS 2020 • Member Kit
Increase your retirement benefit
You can increase your benefit by increasing one or more components of the retirement benefit formula:
Purchase additional service credit
The more service credit you have at retirement, the
greater your retirement benet.
• Buy service credit if you’re eligible for:
» Employer-approved maternity, paternity or
sabbatical leave and leave approved under
the federal Family and Medical Leave Act or
California Family Rights Act.
» Service in out-of-state or foreign public
schools, the military, Peace Corps or
Job Corps.
• Redeposit previously refunded contributions and
restore service credit if you return to CalSTRS
membership or work covered by another eligible
California public retirement system.
• Purchase nonmember service, such as part-time
or substitute service in the California public
school system, earned before you were a CalSTRS
member or after taking a refund and before
becoming a member again.
See the Purchasing Additional Service Credit
booklet at CalSTRS.com/publications.
View the Purchasing Service Credit video at
CalSTRS.com/videos.
Work a while longer
The longer you work, the more service credit you’ll
have—and if you’re under the CalSTRS 2% at 60
benet structure, you may qualify for the one-year
nal compensation and career factor benet
enhancements.
The older you are, the higher your age factor, which
is the percentage of your nal compensation you’ll
receive as a retirement benet for every year of service
credit you earn. The age factor is less if you retire early
and is more if you retire at a later age.
Also, if you postpone your retirement, you can still
make tax-advantaged contributions to your 403(b),
457(b) or IRA account. Take advantage of catch-up
contributions starting at age 50.
Convert unused sick leave to service
credit at retirement
CalSTRS will convert your unused sick leave as reported
by each employer during your last year to service credit
when you retire. If you change employers during your
career, be sure to coordinate with your former employer
to arrange for the transfer of your accumulated unused
sick leave to your new employer.
See the “Your retirement benet”
section in the Member Handbook.
service credit x age factor x nal compensation
It’s cheaper to buy service credit now
rather than later. Estimate the cost to
purchase at CalSTRS.com/calculators.
CalSTRS 2020 • Member Kit 9
If you’re like many educators, you’ll likely need additional savings to bridge the gap between your CalSTRS
retirement benefit and your retirement income goal.
With Pension2, you’ll belong to a supplemental
savings plan with:
• 403(b), Roth 403(b), 457(b) and Roth 457(b) options.
• Low and transparent costs.
• Flexible investment options:
» Easy Choice Portfolios—Consider your risk
tolerance and retirement date, with a mix of
the core investment options.
» Core Investment Options—Build your own
portfolio from a list of more than 20 funds.
» Self-Directed Brokerage Account—Access
agreatly expanded range of mutual funds.
• Professional advice, services and retirement
income planning tools.
Learn the advantages of CalSTRS
Pension2 403(b) and 457(b) plans
Have other retirement savings
accounts? Bring them all together!
Now is the perfect time to combine your
retirement accounts. By rolling over money from
other qualied retirement plans to CalSTRS
Pension2, you’ll manage your retirement savings
all in one place.
Asset consolidation is a powerful management
strategy. Managing one account rather than
several makes it easier to implement and track
your investment strategy.
You may be able to save on fees. Less in fees
can translate into more money for you.
To get a no-cost, no-obligation comparison
of the fees you may pay elsewhere and with
Pension2, call 888-394-2060, option 2.
View the Pension2 ebook and enroll online at
Pension2.com or call toll free 888-394-2060.
10 CalSTRS 2020 • Member Kit
Increase your 403(b) or 457(b) contribution
Are you saving enough? One way to save is to invest in a 403(b) or 457(b) tax-advantaged account.
It’s never too late to start.
Did you know?
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.
Investing involves risk, including risk of loss
of principal.
Find the right 403(b) for you
403bCompare is your resource for information on the
403(b) plans offered by your school district. You’ll
nd everything you need to compare, select and start
building your personal retirement savings.
Visit 403bCompare to:
• Learn about the advantages of a 403(b) account.
• Find your district’s approved list of 403(b) vendors.
• Compare 403(b) plans side by side, including fees,
services and performance.
• Get information about how to enroll and start easy
paycheck contributions.
Check out 403bCompare.com today.
To help you keep your savings on track, use the savings calculator at
CalSTRS.com/savingscalculator. See how much more you could have at
retirement if you increased your monthly contribution by $100.
CalSTRS 2020 • Member Kit 11
View your Retirement Progress Report at myCalSTRS.com.
Keep tabs on your CalSTRS account and service credit balances by reviewing your Retirement Progress
Report each year. Your new report is available online on myCalSTRS 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.
• Two estimates of your CalSTRS monthly retirement benet and your Dened Benet Supplement account
distribution. These are estimates only and not binding.
Be sure to:
• Verify your paycheck information, including
your deductions, each pay period.
• Keep your mailing and email addresses
current at myCalSTRS.com.
Review your Retirement Progress Report
If you believe there’s a discrepancy
in your report, contact your employer
immediately to correct errors.
12 CalSTRS 2020 • Member Kit
Get the facts on Social Security
Government Pension Offset
Affects the Social Security benefit you receive as a
spouse, widow or widower.
• May reduce or eliminate your spousal Social
Security benet.
• Will offset your Social Security benet by two-thirds
of the amount of your CalSTRS retirement benet.
For example: If your spouse is receiving $2,000 a
month from Social Security, you could be eligible
for $1,000 per month before the application of the
Government Pension Offset. If you’re receiving a
CalSTRS benet of $1,500 or more, then you will
not be eligible to receive a Social Security spousal
benet at this time because two-thirds of $1,500
is $1,000. You still may be eligible to receive a
widow’s or widower’s benet in the future.
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’re counting on Social Security through your spouse or other employment, two federal rules—the
Government Pension Offset and the Windfall Elimination Provision—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.
For more information
Find details, including calculators, to help you determine
if these federal rules might affect you at ssa.gov.
Windfall Elimination Provision
Affects your Social Security benefit that is based
on your earnings from other employment.
• May reduce your Social Security benet but will
not eliminate it. The amount of reduction depends
on your years of Social Security earnings and the
amount of your CalSTRS benet.
• The reduction to your Social Security benet
cannot be more than half of your monthly
CalSTRS benet.
• Does not apply if you have 30 or more years of
Social Security substantial earnings.
See the Social Security, CalSTRS and You fact
sheet at CalSTRS.com.
View the Introduction to Social Security video at
CalSTRS.com/videos.
Twenty-seven percent of respondents to our 2019 CalSTRS Member Demographic Survey indicated they were
married to another CalSTRS member. If you’re part of this population, consider how these two provisions could
affect each of you when planning for retirement.
CalSTRS 2020 • Member Kit 13
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.
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. You can also elect an option at
retirement, or under the Coverage B disability
retirement based on your earned income.
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.
You can change your one-time death benet
recipient any time, with no nancial penalty.
Name your one-time death benet recipient using
myCalSTRS. Then be sure to keep your recipient
information current.
14 CalSTRS 2020 • Member Kit
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 earned 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 worker’s
compensation benets.
See Your Disability Benets Guide and the
“Your disability benets” section in the Member
Handbook at CalSTRS.com/publications.
Health insurance in retirement
CalSTRS does not provide health benefits.
Your health benets depend on your
district’s agreement with your employee
bargaining unit. Many retired educators
have to contribute to or pay their own
health insurance costs. Consider setting
aside extra money now for your future.
You and your employer each pay 1.45% of
your wages toward Medicare, the federal
health insurance program for people age
65 and older.
CalSTRS 2020 • Member Kit 15
Your retirement decisions
Are you eligible to retire?
If you’re under the CalSTRS 2% at 60 benet structure,
you’re eligible to retire as early as age 50 with at least
30 years of service credit or age 55 with at least ve
years of service credit or under the special circumstances
of concurrent retirement.
If you’re under the CalSTRS 2% at 62 benet structure,
you’re eligible to retire at age 55 with at least ve years
of service credit or under the special circumstances of
concurrent retirement.
Member-Only Benefit
The Member-Only Benet provides the highest monthly
benet. It does not provide a monthly lifetime benet for
someone after your death. After your death, any remaining
balance in your account will be paid to your one-time
death benet recipient.
Modified Benefit
You can choose to distribute your retirement benet over
your life and the life of one or more people. You’ll receive
a reduced monthly lifetime benet, known as a Modied
Benet, based on the option you choose, your age and
your beneciary’s age at election. When you die, your
option beneciary will receive a lifetime monthly benet.
Your option choices include providing your beneciary
with 100%, 75% or 50% of your modied Member-Only
Benet. Or you can choose the Compound Option that
lets you provide a lifetime monthly benet for one or
more individuals and keep a portion of your benet as
a Member-Only Benet. After you retire, you can change
your option beneciary only under limited circumstances.
It’s never too early to start planning for your retirement. Attend a CalSTRS workshop or benets planning
session to help you with your retirement decisions.
To nd out how each option would affect your
retirement benet, use the Retirement Benefits
Calculator at CalSTRS.com/calculators or
schedule a benets planning session at
CalSTRS.com/benefits-planning.
Electing an option beneficiary
before retirement
You can elect an option beneciary when you’re
eligible but not yet ready to retire.
Advantages include:
• The benet begins immediately after your death.
• If you die before you retire, your option
beneciary will receive a monthly lifetime benet.
If you did not preelect an option beneciary and
you die before retirement, your beneciary may
receive a smaller lifetime benet or none at all.
• In most cases, the Modied Benet you’ll receive
in retirement will be higher if you preelect an
option than if you elect an option at the time
of retirement.
Disadvantages include:
• If you cancel or change your option before
retiring, a lifetime assessment will be applied
to your retirement benet. The assessment may
reduce your retirement benet for life.
• If your option beneciary dies before you retire,
the election will be canceled automatically.
Your retirement benet will be subject to an
assessment that may reduce your benet for life.
If you choose to elect an option before retirement,
complete and submit the Preretirement Election of an
Option form online using myCalSTRS.
See “Protecting your loved ones before you retire”
and “Protecting your survivors with a lifetime
benet” in the Member Handbook.
View the Beneciary Options video at
CalSTRS.com/videos.
Do you want to provide a lifetime
monthly retirement benefit to
someone after your death?
16 CalSTRS 2020 • Member Kit
How do you want to receive the
funds in your Defined Benefit
Supplement account?
When you retire, you’ll receive the funds in your
Dened Benet Supplement account. Your most
recent Retirement Progress Report shows the total
amount in your account at the end of the last
school year.
Things to consider
The amount in your account determines how you can
receive your funds at retirement:
• If you have less than $3,500 in your account, you
will receive your account balance as a lump-sum
payment. You may receive your funds directly or
roll them into a qualied retirement plan, such as
CalSTRS Pension2.
• If you have $3,500 or more in your account, your
choice depends on whether you elect a Member-
Only Benet or a Modied Benet. You can
choose a lump-sum payment, annuity payments
or both.
See the “Your retirement benet” section in the
Member Handbook.
View the three-part Dened Benet Supplement
Program video series at CalSTRS.com/videos.
Ease into retirement under the Reduced
Workload Program
If you’re not ready to retire but want to cut back on
the number of hours you work, consider the Reduced
Workload Program (also known as the Willie Brown
Act). This program allows you to work less than full
time but continue to earn service credit as if you were
working full time. You and your employer continue to
pay CalSTRS contributions based on your full-time
annualized pay rate.
To participate, you must be at least age 55, have
at least 10 years of service credit and have been
employed full time in a CalSTRS-covered position
for the last ve years. Talk to your employer to nd
out whether the program is offered. Availability and
participation are at your employer’s discretion.
See the “Reduced Workload Program” section in
the Member Handbook.
If you contributed to another public
retirement system
If you’re also a member of another public retirement
system in California, you’ll need to le for retirement
separately with each system.
When calculating your retirement benet, CalSTRS
may be able to use your compensation for service
performed under the other retirement system if you
didn’t work for both systems at the same time.
See the Concurrent Retirement fact sheet at
CalSTRS.com/publications for more information.
Use the worksheets on pages 22 and 24 to estimate your expenses and income in retirement.
Estimate your projected retirement benet 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?
CalSTRS 2020 • Member Kit 17
As you plan for retirement, consider how you will
spend your days and how much money you will need.
If you think you may return to work, here’s what you
need to know:
• You can work in any job outside the California
public school system with no restrictions on
your earnings. This includes working for private
schools, state colleges and universities, and the
private sector.
• Under the separation-from-service requirement,
your CalSTRS benet will be reduced by the
amount you earn performing retired member
activities during the rst 180 calendar days
following your most recent retirement date, up to
your benet amount payable during that period.
This includes performing retired member activites
as a substitute teacher and as an employee of a
public school system, an independent contractor
or an employee of a third party.
• If you perform retired member activities as an
employee of the California public school system,
including substitute teaching, an independent
contractor, or an employee of a third party, there’s
a limit to the amount of money you can earn in a
year without affecting your retirement benet. For
scal year 2020–21, the postretirement earnings
limit is $47,713.
• If you retired under the Retirement Incentive
Program, you will lose the ongoing increase in your
benet from the incentive if you return to work
within ve years of retirement in any job with the
employer that granted the incentive.
Your responsibility
If you return to work in the California public school
system, you will need to keep track of your gross
earnings (your income before any taxes are deducted)
so you do not exceed the earnings limit. CalSTRS
will also monitor your earnings, but it usually takes
three to four months to receive, review and post your
earnings to your account.
If you earn more than the limit, your monthly
retirement benets will be reduced by the excess
amount, up to the amount of your total annual
benet. For example, if you earn $3,000 above the
limit in a scal year (July 1 to June 30), we will reduce
your retirement benets by $3,000.
NOTE: About half of CalSTRS retirees volunteer their
time during retirement. If you volunteer, be aware
that an employment arrangement that involves
volunteering in a position to perform service that
would otherwise be creditable to CalSTRS may be in
violation of the postretirement earnings limitations.
See the Working After Retirement fact sheet at
CalSTRS.com/publications and “Reinstatement to
active member status” in the Member Handbook.
DID
YOU
KNOW
DID
YOU
KNOW
?
?
22% of retired members work for pay.
The main reason: they enjoy working and want to stay active
(26%). Some 24% of those working for pay said they need the
income for living expenses. One-third of those retirees working
for pay work in CalSTRS-covered employment. About half of all
CalSTRS retirees do volunteer work.
Working after retirement
—CalSTRS 2017 Retirement Readiness Assessment Survey
18 CalSTRS 2020 • Member Kit
View our member benefit videos
CalSTRS.com/videos
Browse our library of three- to ve-minute member education videos to learn steps you can take now for
your secure future.
Understanding the Formula
Know how your retirement benet is calculated.
The Gap
Consider how much of your working salary you’ll need to live the retirement you want.
Defined Benefit Supplement Program
Learn about this additional source of money for retirement.
Disability Benefits
Find out about your disability coverage, eligibility requirements and the application process.
Stay engaged
Read our Connections newsletter, which provides
information about benets, retirement planning,
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.
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.
CalSTRS 2020 • Member Kit 19
Attend a workshop
Financial awareness workshops
Learn how to make smart decisions today about your nancial
future by attending our nancial awareness workshops.
Save for Your Future—Discover new ways to create a spending
plan, understand your credit report, build and keep good credit,
manage debt and ask the right questions before investing.
Plan for Your Future—Create an action plan for your retirement
picture, identify your expenses in retirement and how they’ll
likely change over time, and nd out about Medicare basics
and Social Security offsets if you’ll qualify for Social Security
from other work or a spouse.
Protect Your Future—Learn how to maximize and protect your
income and reduce the risk of underestimating your expenses
in retirement, and how to choose a nancial professional.
Register now at CalSTRS.com/financial-awareness.
Want to learn more about your benefits as a CalSTRS member? How to save, plan and protect your
financial future? Take advantage of our workshops for every stage of your career.
My Retirement workshops
Looking for a quick way to learn how to make the most of your CalSTRS membership? The My Retirement
interactive workshop series is for you.
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, plus 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.
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
Your retirement
picture
Work
¨Start a new career or business
¨Work part time or consult
¨Volunteer
¨Be a mentor
Family
¨Visit family
¨Care for grandchildren
¨Care for a parent
¨Care for a spouse
Education
¨Take classes
¨Learn a language
¨Read more
¨Focus on staying healthy
Travel
¨Travel often
¨Take one trip per year
¨Buy an RV
Fun
¨Spend more time on hobbies
¨Dine out often
¨Attend special events
¨Plant a garden
Transportation
¨Reduce the number of cars I own
¨Use public transportation
Housing
¨Stay in my current home
¨Downsize my living space
¨Pay off a home mortgage
¨Remodel
¨Do maintenance projects
¨Rent
¨Buy a second or vacation home
¨Move to an active adult community
¨Live with family
¨Look into assisted living
Location
¨Live near friends or family
¨Live in a different climate
¨Live closer to my interests
¨Move somewhere with a lower cost of living
Other
Would you like to start a new business? Volunteer? Travel? Spend more time with family or pursue new hobbies?
Check all the things you see yourself doing when you retire.
CalSTRS 2020 • Member Kit 21
Your estimated monthly retirement expenses
Expense
Current
monthly cost
Ination
factor
Monthly cost at retirement
(current cost X ination factor)
Mortgage/rent
(excluding property taxes and insurance)
$ N/A $
Property taxes $ $
Homeowner’s insurance $ $
Homeowner’s association dues $ $
Utilities
(gas, electric, water, sewage, trash)
$ $
Cable TV, internet, phone,
streaming services
$ $
Home maintenance $ $
Automobile/transportation
(gas, maintenance, insurance)
$ $
Food (groceries, eating out) $ $
Clothing $ $
Personal care $ $
Dependent care $ $
Health care/Medicare $ $
Loan payments
(car, home equity, credit line)
$ N/A $
Credit cards
(minimum payment)
$ N/A $
Entertainment $ $
Travel $ $
Charitable donations or gifts $ $
Other $ $
MONTHLY TOTAL $ $
Fill in the first column with what you’re now spending monthly. Next, calculate the ination factor by following
the steps listed on the ination factor table on the following page, then place the ination factor in the second
column. Multiply the rst column by the second column to get an idea of the income you’ll need during your rst
year of retirement. Mortgage, rent, loan and credit card payments are set under specic terms and rates, so no
ination applies.
22 CalSTRS 2020 • Member Kit
Inflation is defined as a sustained increase in the general level of prices for goods and services. It’s
measured as an annual percentage. As ination rises, every dollar you own buys a smaller percentage of goods
and services. While ination affects everyone, those on a xed income may feel the effect more than others.
The steps to calculate the ination factor for the worksheet on the previous page are:
1. Choose the number of years until your retirement starts from the far left column in the table below.
2. Select an estimated annual ination rate from the row across the top. Ination cannot be predicted from
year to year. From 2000 to 2009, ination averaged 2.56%; from 1990 to 1999, ination averaged 3%; and
from 1980 to 1989, ination averaged 5.51%. You’ll have to make an educated guess.
3. Read across and down to nd the appropriate ination factor corresponding to your predicted rate of
ination. For example, if your retirement is ve years out and you guess a 5% annual ination rate, your
ination factor will be 1.28. List your ination factor in the ination factor column of your worksheet.
4. Finally, multiply your estimated monthly living expenses from the rst column by the ination factor in the
second column to get an idea of the income you’ll need for your rst month of retirement if you would like to
maintain your current lifestyle.
Annual inflation rate
Years to retirement 3% 5% 7% 10%
1 1.03 1.05 1.07 1.10
5 1.16 1.28 1.40 1.61
10 1.34 1.63 1.97 2.59
15 1.56 2.08 2.76 4.18
20 1.81 2.65 3.87 6.73
25 2.09 3.39 5.43 10.83
30 2.43 4.32 7.61 17.45
Inflation factor
Check Your
medicare
Check Your
medicare
IQ
IQ
Medicare starts at age 65, but you may still have
expenses that aren’t covered, such as copayments,
deductibles and custodial care. According to the
Employee Benet Research Institute, Medicare
covered 64% of the cost of health care services
for those age 65 and older in 2016. Out-of-pocket
spending accounted for 11%, with private insurance
covering the rest.
CalSTRS 2020 • Member Kit 23
Have I received estimates of my
monthly benets from all sources?
Do these income sources adjust
with ination?
What are the tax considerations
of these income sources?
What happens to these income
sources if I or my signicant
other dies?
Do I have a strategy for taking
distributions from each account?
Have I looked into converting these
accounts to guaranteed income,
if needed?
How do the IRS required minimum
distribution rules affect these accounts?
What are the tax considerations of these
income sources?
Guaranteed income checklist
Nonguaranteed income checklist
Guaranteed income
Nonguaranteed income
Dened Benet Program pension
My benet $
Other benet $
Dened Benet Supplement payment
Lifetime monthly annuity $
Social Security
My benet from other work $
Other benet $
Veteran’s benet
My benet $
Other benet $
Annuities
My annuity income $
Other annuity income $
Other guaranteed income
Other income $
Total guaranteed monthly income $
403(b), 457(b), 401(k), IRA
Monthly distributions $
Roth 403(b), Roth 457(b), Roth 401(k), Roth IRA
Monthly distributions $
Brokerage and savings accounts
Monthly distributions $
Full-time and part-time work
Income $
Income outside of work
Real estate rental income $
Other annuity income $
Other $
Total nonguaranteed monthly income $
TOTAL MONTHLY INCOME $
Your retirement income worksheet
This worksheet will give you an idea of what your income in retirement will look like.
Enter monthly amounts before taxes.
24 CalSTRS 2020 • Member Kit
Important Documents
California State Teachers’ Retirement System
COM 1767 (rev 6/20)
Printed on recycled paper
CalSTRS benefits planning offices
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
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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