CalSTRS Retirement Payout Options

As a retired CalSTRS member, you will receive a monthly benefit for the rest of your life. This pension amount is determined by the following formula:

Service Credit x Age Factor Percent x Final Compensation

When you are nearing or ready to retire, you can chose to receive a modified or unmodified benefit. An unmodified benefit means that the CalSTRS member will receive a set pension amount each month. A modified benefit means that the CalSTRS member would like to receive lifetime monthly payments, but also elect a beneficiary to receive a monthly payment option upon the member’s death. The modified benefit will lower the CalSTRS members benefit.

CalSTRS offers five pension payout options:

Member Only — With this option, the member will receive a benefit in a monthly payment. Upon his or her death, a beneficiary will receive any remaining accumulated contributions in a one-time death benefit payment.

50% Beneficiary — This is a modified benefit option which leaves a beneficiary half of the modified benefit upon the member’s death.

75% Beneficiary — This is a modified benefit option which leaves a beneficiary 75 percent of the modified benefit upon the member’s death.

100% Beneficiary — Upon the member’s death, this modified benefit option leaves a beneficiary the same modified allowance he or she received.

Compound — This is a customizable option which allows the member to designate multiple beneficiaries. He or she will receive a modified benefit option during retirement. Upon death, the beneficiaries will each receive a modified monthly benefit.

If a beneficiary listed under the 50, 75 or 100 percent options dies before the member, the option will automatically revert to a member only option. The benefit choice must be made before your effective date of retirement.

If a CalSTRS member is eligible for retirement, but has not yet elected to retire, he or she can chose an option before retirement. By doing this, he or she will ensure that a beneficiary receives a monthly income if the member dies before retiring.

One-Time Death Benefit

It is important to note that the CalSTRS retirement benefit option beneficiary is different from the one-time death benefit recipient. The CalSTRS member can designate a recipient to receive a one-time death benefit. This beneficiary can be living persons or an estate, trust, charity or other chosen entity. At the time of death, the beneficiary will receive the balance in the Defined Benefit Supplement account. If the CalSTRS member does not elect a beneficiary to receive the retirement benefit, the one-time death benefit recipient may also receive the contributions and interest in the Defined Benefit account.

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