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CalSTRS Pension
Your CalSTRS retirement benefit comes from one formula with three inputs:
Service credit × age factor × final compensation = your monthly benefit
That's it. No market performance, no account balance, no investment returns. Three numbers, multiplied.
What makes it feel complicated is that two of those three numbers depend on rules that changed in 2013, so the answer is genuinely different for a teacher hired in 2009 than for one hired in 2015. Here's each piece, and how to tell which set of rules applies to you.
This is the question to answer before anything else, because it changes the math.
California's Public Employees' Pension Reform Act of 2013 (PEPRA) created a second benefit structure. Which one you're in depends on a single date:
The "2%" is the age factor, and the age attached to it is the age at which you reach that 2%. Everything below applies differently depending on which structure you're in.
Service credit is the accumulated time you worked and contributed to the Defined Benefit Program. A full school year of full-time work is one year of service credit. Part-time work earns partial credit.
This is the most straightforward of the three, and the one you have the most direct control over, because it grows every year you keep working.
The age factor is the percentage of your final compensation you're entitled to for each year of service credit. It's determined by your age on the last day of the month your retirement takes effect.
Under CalSTRS 2% at 60: the factor is set at 2% at age 60. It decreases if you retire before 60, down to 1.1% at age 50. It increases to a maximum of 2.4% if you retire at 63 or later.
Under CalSTRS 2% at 62: the factor is set at 2% at age 62. It decreases if you retire before 62, down to 1.16% at age 55, and increases to a maximum of 2.4% at age 65 or later.
Same maximum, reached three years later. That's the core of what changed in 2013.
CalSTRS publishes the full age factor table month by month, and it's worth looking at your exact age rather than rounding, because the factor moves with each month, not each year.
If you're a 2% at 60 member with 30 or more years of earned service credit, CalSTRS adds 0.2% to your age factor, up to that same 2.4% maximum.
2% at 62 members are not eligible for the career factor. This is one of the quieter differences between the structures and it catches people who've heard about it from a colleague hired a few years earlier.
Final compensation is the highest average annual compensation earnable over a defined stretch of your career. The stretch depends on your structure:
Under 2% at 60: the highest average over three consecutive school years. But if you have 25 or more years of qualified service credit, CalSTRS uses your highest 12 consecutive months instead, which is usually a meaningfully better number.
Under 2% at 62: always the highest average over 36 consecutive months, with no 12-month option regardless of how long you've taught. PEPRA also applies a lower cap on the compensation that can be counted.
A worked example, using round numbers for clarity rather than anyone's real figures.
A teacher in the 2% at 60 structure retires at 63 with 30 years of service credit and final compensation of $90,000.
30 × 2.4% = 72% of final compensation. That's $64,800 a year, or $5,400 a month, before any survivor option, taxes, or deductions.
Change one input and the whole thing moves. The same teacher retiring at 60 instead of 63 would use a 2% age factor plus the 0.2% career factor for 30 years of service, so 2.2%, giving 66% instead of 72%. Three years of work, six percentage points of benefit, for life.
That sensitivity is the real reason the formula is worth understanding rather than just estimating.
Worth stating plainly, because this is where planning actually happens.
It doesn't include Social Security. Your CalSTRS-covered teaching doesn't earn Social Security credits. If you have a benefit, it comes from other work or a spouse's record, and the rules there changed significantly in 2025.
It doesn't include anything you saved yourself. Your 403(b) or 457(b) is a separate account with a separate balance, and it isn't part of this calculation at all. It's important to know these are in the investments best suited for your needs and what to realistically expect as far as additional income from these accounts to complement your CalSTRS pension.
It doesn't adjust to your actual expenses. The formula produces a number based on your career, not based on what your life costs. Whether those two match is a separate question, and it's usually the one worth asking first.
Where can I see my own numbers?
Your annual CalSTRS statement shows your accumulated service credit and compensation history, and CalSTRS provides a Retirement Benefits Calculator on their site that uses your actual figures. Start there rather than with an estimate.
Does my 403(b) affect my pension calculation?
Your pension is calculated from service credit, age factor, and final compensation. Having a dependable 403(b) to draw from, as well as not contributing monthly anymore to your 403(b) just like your CalSTRS dues when you retire, will make your pension feel better.
What's the earliest I can retire?
Under 2% at 60, generally age 55 with five years of service credit, or age 50 if you have 30 years. Under 2% at 62, the minimum is age 55 with five years, and there's no path to retire at 50. Retiring earlier means a lower age factor for the rest of your life.
I have 25 years of service. Does that change anything?
If you're in the 2% at 60 structure, yes. At 25 or more years of qualified service credit, final compensation is based on your highest 12 consecutive months instead of three years, which usually raises the number. The 2% at 62 structure doesn't offer this.
Is the maximum really 2.4%?
Yes. The maximum age factor is 2.4% under both benefit structures. For 2% at 60 members, the age factor reaches 2.4% at age 63. If someone had 30 years of service, they could reach 2.4% as early as age 61½ with the career factor increase of 0.2%. For 2% at 62 members, the maximum 2.4% age factor is reached at age 65, and there is no career factor.
Does the pension increase after I retire?
CalSTRS provides an annual 2% cost-of-living adjustment (COLA). Unlike a traditional compounded COLA, the 2% adjustment is based on your original retirement benefit, so it does not compound over time. Because the adjustment does not directly track inflation, the rising cost of living can gradually reduce what your pension can buy over a long retirement.
Once you have an idea of what your CalSTRS pension may provide, the next step is determining whether that income, along with your other retirement savings and benefits, will be enough to support the retirement that you want.
Robby Welles helps California educators understand how their pension fits into their overall retirement picture, identify potential income gaps, and develop a strategy for the savings they've worked so hard to build.
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Sources: California State Teachers' Retirement System: understanding the formula, age factor, final compensation, and two benefit structures (calstrs.com). California Public Employees' Pension Reform Act of 2013.
Reviewed August 2026.
