Retirement Benefits

Be Retirement Ready: Have More Money in Your Nest Egg

10 months ago
Man taking notes and looking at laptop, at home office, portrait.

Did you know the more service credit you have at retirement, the higher your monthly retirement allowance may be?

In many instances, the purchase of service credit can make a substantial difference for your final retirement allowance. Below is an example of two members, one who purchased service credit and one who didn’t.

Table showing the estimated retirement allowance for member A and member B. Member A has 20 years of earned service credit, 0 years of purchased service credit which equals to 20 years total service credit. Muliplied by the 2.0% Benefit Factor. Multiplied by the final compensation of $4,000. Equals $1,600 Estimated Retirement Allowance. Member B has 20 years of earned service credit, 4 years of purchased service credit which equals to 24 years total service credit. Muliplied by the 2.0% Benefit Factor. Multiplied by the final compensation of $4,000. Equals $1,920 Estimated Retirement Allowance.

CalPERS provides eligible members with the option to purchase many different types of service credit, including leaves of absence, military, redeposit of withdrawn contributions, and service prior to membership.

It’s easy to request a service credit purchase:

  1. Log in to myCalPERS, go to the Retirement tab and select Service Credit Purchase, followed by the Search for Purchase Options button.
  2. Complete a series of questions to help determine which service credit purchase types you may be eligible for.
  3. Request the cost for any available purchase options online.

Save money and purchase service credit early in your career because the cost will be lower as less interest has accrued on the service credit you want to purchase. The example below shows the cost of purchasing service credit sooner rather than later.

Bar graph of Service Prior to Membership Example. When the request date to purchase service credit was January 1, 2018, the cost was $4,436. When the request date to purchase service credit was January 1, 2028, the cost will be $7,945.

Learn more about service credit purchase types, eligibility, payment options, and how to estimate your cost and benefit increase by visiting our website and reading our Service Credit Purchase handout (PDF).

You can also find detailed information in our two service credit purchase publications: A Guide to Your CalPERS Service Credit Purchase Options (PUB 12) (PDF) and A Guide to Your CalPERS Military Service Credit Options (PUB 15) (PDF).