Estimating Your Increased STRS Benefits

Use this simple worksheet to calculate your benefits

EXAMPLES:

The age factor is a percentage determined by your age at retirement. It's one of the three elements multiplied to determine your monthly service retirement allowance. The other elements are your years of service credit and your final compensation (defined as the average of your highest 36 consecutive months of salary.)

The new age factors provide a bonus for members who continue to work beyond age 60. Actually, by working past age 60, you will increase two elements used to calculate your unmodified retirement allowance. You can retire at a later age, achieving a higher age factor and you will also accumulate more years of service credit.**

Example 1 shows the effect of retiring at age 63. For purposes of illustration, Sheila's years of service credit are the same in both cases. Example 2 shows the effects of Mike's retirement allowance of an increased age factor and increased years of service credit.

Example 1

Sheila retires, after Jan. 1, 1999, at age 63 with 28 years of service credit and a final compensation of $4,000 a month. Sheila's age factor as of Jan. 1, 1999, will be 2.4 percent.

Sheila's new unmodified allowance will be 20 times higher than it would have been using the current age factor.

Age factor before 1/1/99
28 (years of service credit)
x 2.0 percent (previous age factor)
x $4,000 (final compensation)
$2,240 unmodified allowance

Age factor as of 1/1/99
28 (years of service credit)*
x 2.4 percent (new age factor)
x $4,000 (final compensation)
$2,688 unmodified allowance

Example 2

Mike intended to retire at age 60 with 26 years of service credit. With the new benefit structure, Mike defers his retirement, works three more years and retires at age 63 with 29 years of service credit. Mike's final compensation is $4,000 a month. Mike's age factor as of Jan. 1, 1999 will be 2.4 percent.

Mike's new unmodified retirement allowance at age 63 is 34 percent higher than it would have been under the current calculation and at age 60. If his salary had increased during his final three years, his new retirement allowance would be even higher.

Current factor/Service credit Before 1/1/99
26 (years of service credit)
x 2.0 percent (previous age factor)
x $4,000 (final compensation)
$2,080 unmodified allowance

Age factor/Increased service credit as of 1/1/99
29 (increased service credit years)*
x 2.4 percent (new age factor)
x $4,000 (final compensation)
$2,784 unmodified allowance

*Unused Sick Leave Formula
Service credit granted for unused sick leave is determined by dividing the number of accumulated unused sick days (as certified by your last employer) by the number of base service days required to complete the last school year, if employed full time.

Example:
days of unused sick leave ÷ days for full school year   =   service credit
                    90                                          175                                  0.5142

Career Bonus
** The 30 years of service credit to qualify for the career bonus does not include service credit for unused sick leave or a "Golden Handshake" program.

 

Information provided by STRS http://www.strs.ca.gov

FACCC 10/6/98, 10/12/98