Teacher Pension California Concept You Should Know About

teacher pension california

California educators are entitled to receive various state benefits from the Teacher’s Retirement System. When you consider a career in teaching, you’ve most likely focused on the level of salary you might receive and the number of hours you’ll work. While most teachers earn competitive wages, it is the benefit that they gain for their years of service that prove to be slightly more important. California provides numerous employee benefits to teachers that make them capable to attend the challenges one might encounter.

Eligibility For Teacher Pension California

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Like any other state, teachers must serve a certain number of years to become eligible for a pension. In California, eligibility for a pension requires a 5 year vesting period. Once the 5 year mark is attained, a teacher can collect the pension as defined by the formula. Moreover, educators can only collect pension once they reach the state’s retirement age. However, for educators who leave without completing 5 years of service, they receive their own contributions back from the plan with an interest. But they lose all the contributions made on their behalf by school districts and the state.

For new teachers who are starting out in California, once they reach 62 years of age and they have accrued at least 5 years of service, they can retire with full benefits.

Also, once teachers reach age 55 and have accrued at least 5 years of service, California allows them early retirement. However, when teachers take this option, their benefits get reduced based on how early they are retiring and their years of experience.

How Teacher’s Pension Work In California?

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The teachers in California are a part of the California State Teachers Retirement System (CalSTRS), which provides teachers with a Defined Benefit (DB) Pension Plan in order to help them reach their future goals. Most of the teachers are covered by a similarly structured DB plan that is administered at the state level. The benefit level of CalSTRS is well within the norms of teacher plans nationally. Unlike other retirement funds, a teacher’s pension wealth in California is determined by a formula that is based on their years of experience and their final salary.

How To Calculate Teacher’s Pension In California?

Teacher’s pension wealth is derived by using a formula. It is important to note that the state evaluates an educator’s final salary based on their highest average salary that is earnable for twelve consecutive months. For example, if a teacher has worked for 25 years with a final average salary of $60,000, then he/she will be eligible to get an annual pension benefit worth 50% of the final salary.

Teacher Pension Wealth = Service Credit × Age Factor × Final Compensation

Service Credit: Your years of service that is determined by years of employment as a CalSTRS and/ or CalPERS member.

Age Factor: It is your retirement age and a multiplier that will increase with the age. Meaning, the more your age is during retirement, the more you will receive in retirement.

Final Compensation: it is the amount earned in your final year of full time work.


In California, you receive a guaranteed lifetime monthly retirement benefit. It does not depend how much you’ve contributed or how well CalSTRS investments perform, but on a formula.

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