How the CalSTRS Pension Formula Works
Age factor × service credit × final compensation: how each piece works for California teachers under 2% at 60 and 2% at 62.
A CalSTRS pension is age factor × service credit × final compensation. The age factor is a percentage that grows the longer you wait to retire (2% at 60 or 2% at 62, depending on when you started, up to 2.4%). Multiply it by your years of service and your highest average monthly pay. A 2% at 62 teacher retiring at 62 with 30 years and $9,000 a month of final compensation gets about $5,400 a month for life.
Which formula you're under
- CalSTRS 2% at 60: you first worked in a position that could have been covered by CalSTRS before January 1, 2013 (or were in a concurrent system such as CalPERS before then and joined CalSTRS within six months).
- CalSTRS 2% at 62: you first worked in such a position on or after January 1, 2013.
Either way you can retire once you are 55 with at least 5 years of service credit. Your myCalSTRS Retirement Progress Report shows which structure you're in.
1. The age factor
The percentage depends on your age, in years and months, on the last day of the month your retirement starts. Selected values (at the start of each age):
| Age | 2% at 60 | 2% at 62 |
|---|---|---|
| 55 | 1.4% | 1.16% |
| 57 | 1.64% | 1.4% |
| 60 | 2% | 1.76% |
| 62 | 2.267% | 2% |
| 63 | 2.4% | 2.133% |
| 65 | 2.4% | 2.4% |
Under 2% at 60 the factor runs from 1.1% at 50 (with 30 years of service) to 2.4% at 63. Under 2% at 62 it runs from 1.16% at 55 to 2.4% at 65. Each extra month adds a little, so retiring a few months later raises the benefit permanently.
Career factor (2% at 60 only): with 30 or more years of service credit, 0.2% is added to the age factor, up to the 2.4% maximum, which can be reached at 61 and six months.
2. Service credit
Service credit is the years, including partial years, in which you earned creditable compensation and contributed to the Defined Benefit Program. You earn it in proportion to the full-time contract you work, up to one year per school year. Pay for work beyond a full year, such as extra assignments, goes to your Defined Benefit Supplement account instead.
3. Final compensation
Your highest average annual compensation earnable over 36 consecutive months, expressed as a monthly figure. A 2% at 60 member who retires with 25 or more years of service uses the highest 12 consecutive months instead. "Compensation earnable" is generally what you would earn working full time in a school year.
For 2% at 62 members, creditable compensation is capped: $191,866 a year for 2026-27. The 2% at 60 limit ($360,000 for 2026-27) rarely matters for teachers.
Worked examples
| 2% at 62, retires at 62 | 2% at 60, retires at 60 | |
|---|---|---|
| Age factor | 2% | 2% + 0.2% career = 2.2% |
| Service credit | 30 years | 30 years |
| Final compensation | $9,000/month | $9,000/month |
| Monthly benefit | $5,400 | $5,940 |
| Share of final pay | 60% | 66% |
CalSTRS's own example: a 2% at 60 member retiring at 63 with 24 years and $5,500 of final compensation gets 2.4% × 24 × $5,500 = $3,168 a month, 57.6% of final pay.
Providing for a spouse or partner
The formula gives the Member-Only Benefit, which stops when you die. To leave a monthly benefit to someone, you can choose a Modified Benefit option, which pays you less during your life and continues payments to your beneficiary for theirs. The reduction depends on the option and both ages.
Taxes
CalSTRS benefits are taxable income on both federal and California returns (California taxes pensions like wages). If you move out of California after retiring, federal law stops California from taxing the pension. See moving out of California: taxes.
Estimate your benefit
The CalSTRS Pension Calculator uses the full month-by-month age factor tables, the career factor and the compensation cap. Compare retirement dates a few months apart to see how much each month adds.
Frequently Asked Questions
What is the CalSTRS retirement formula?
Age factor x service credit x final compensation = your monthly Member-Only Benefit. The age factor is a percentage set by your age when you retire, service credit is your years of CalSTRS-covered work, and final compensation is your highest average monthly pay over 36 consecutive months (12 months in some cases).
What is the difference between 2% at 60 and 2% at 62?
Members who first worked in a CalSTRS-covered job before January 1, 2013 are 2% at 60: the age factor reaches 2% at 60, they can retire as early as 50 with 30 years, and they can get a career factor. Members hired on or after that date are 2% at 62: earliest retirement 55, 2% at 62, no career factor, and a cap on creditable pay.
What is the CalSTRS career factor?
For 2% at 60 members with 30 or more years of service credit, 0.2% is added to the age factor, up to the 2.4% maximum. It doesn't exist for 2% at 62 members.
How many years do I need to retire from CalSTRS?
At least 5 years of service credit and age 55. A 2% at 60 member with 30 years can retire as early as 50.
What is the maximum CalSTRS age factor?
2.4%: at age 63 for 2% at 60 members (reachable at 61 and six months with the career factor), and at age 65 for 2% at 62 members.
This article is for general information only and is not financial advice. Your myCalSTRS Retirement Progress Report shows your own benefit structure and service credit. Sources: CalSTRS "Understanding the Formula" (2025); CalSTRS Member Handbook (age factor tables, career factor); CalSTRS compensation limits for 2026-27.