CalSTRS/CalPERS & Pension Planning: A Clear Playbook for California Public Employees

Step 1: Define what your CalSTRS or CalPERS pension will actually do

Your CalSTRS or CalPERS pension is generally based on a formula that includes your years of service, age at retirement, and final compensation. While the formulas differ between systems and membership tiers, the planning process is very similar.

What we'll clarify:

• Expected pension start date and what it means for lifetime income
• Survivor benefit elections (and what tradeoffs you're making)
• Inflation considerations (purchasing power over a 20–30 year retirement)
• Your "net pension" after taxes and deductions, not just the gross estimate

The goal is precision. A solid plan doesn't guess—it quantifies.

Step 2: Understand how Social Security fits into your retirement

Not every California public employee participates in Social Security. Whether you'll receive Social Security benefits depends largely on your employment history.

Our approach:

• Verify whether you've earned enough Social Security credits
• Estimate your projected retirement benefits
• Coordinate the timing of your pension and Social Security claiming strategy
• Evaluate any spousal or survivor Social Security benefits that may be available

Good news: The Windfall Elimination Provision (WEP) and Government Pension Offset (GPO) have been repealed under the Social Security Fairness Act. As a result, many public retirees who were previously affected may now qualify for larger Social Security benefits than under prior law.

Where 403(b) and 457(b) fit (and why it matters)

Many CalSTRS and CalPERS members have access to a 403(b), 457(b), or both, depending on their employer.

403(b): Similar to a 401(k). Contributions may be pre-tax or Roth, depending on your plan's features.

457(b): Often a valuable option for public employees because of its flexible distribution rules after separation from service (taxes still apply).

Strategic advantages of using these accounts well:

• Creates a second "engine" for retirement income
• Offers tax planning flexibility (pre-tax vs. Roth)
• Provides liquidity for early retirement years, when applicable

For firefighters, police officers, and other public employees who may retire before traditional retirement age, understanding the distribution rules of a 457(b) can be especially important.

Step 6: Execute with focus—and revisit the plan routinely

This is where confidence comes from: not from hoping everything works out, but from having a plan you actively manage.

What execution looks like:

• Align your contribution strategy for 403(b) and/or 457(b) plans
• Set an investment approach that matches your timeline and risk tolerance
• Establish a tax-efficient retirement withdrawal strategy and update it as conditions change
• Review beneficiary designations, survivor elections, and retirement income strategies as life evolves

Markets will move. Tax laws will change. Your life will change. A strong retirement plan adapts without losing its direction.

The bottom line

CalSTRS and CalPERS pensions are valuable retirement benefits—but for many households, they're just one piece of the overall retirement plan. The strongest outcomes come from pairing your pension with a thoughtful strategy for Social Security, taxes, healthcare, investments, and retirement withdrawals. Workplace retirement plans such as 403(b)s and 457(b)s can provide valuable flexibility, and if an annuity is appropriate, it should serve a clearly defined purpose within the overall plan—not replace the planning itself.

If you'd like, we can map your pension to your retirement timeline, quantify your income needs, and build a plan that gives you a clear path forward—before today's decisions become tomorrow's deadlines.