Timing is everything, especially when it comes to retirement.
Once you reach your eligible retirement age, your benefit factor increases with each quarter year of age (or every three months based on your birthday) until you retire. This is known as your “birthday quarter.”
By strategically planning around your birthday quarters, you can increase your pension payments.
What’s an Example?
For example, based on the classic 2% at 55 formula, you’re eligible to retire at age 50 with a multiplier of 1.1. That multiplier increases every three months after your birthday. At age 63, that multiplier reaches the 2.5% maximum. In this example, if you’re under 63, a birthday quarter will increase your benefit payment.
View the benefit factor chart for your formula for more details.
Breaking Down Your Retirement Calculation Formula
Service Credit x Benefit Factor x Final Compensation = Unmodified Allowance
- Service credit is your years of service.
- Benefit factor is the percent of final compensation based on your age at retirement.
- Final compensation is an average of your highest monthly pay rate.
We use these three factors to calculate your retirement benefit. When you retire, we multiply your years of service credit by your benefit factor, then multiply that by your final compensation, which gives your unmodified allowance. The unmodified allowance is the pension you earn over your career and is the highest amount you can receive when you retire.
Birthday Quarters and Your Benefit Factor
Your benefit factor is the percentage of pay you’re entitled to for each year of service credit based on your age at retirement. It’s based on the retirement formula contracted by your employer.
Once you reach your eligible retirement age, your benefit factor increases with each quarter year of age until you retire.
For example, if your birthday is March 10, your birthday quarters are:
- Birthday – March 10
- ¼ year – June 10
- ½ year – September 10
- ¾ year – December 10
This means that your benefit factor increases for each quarter year of age that you delay your retirement after your earliest allowable retirement date, up to the maximum age determined by your retirement formula.
Example Benefit Factor – State or School 2% at 55
| Age | Birthday Year | 1/4 Year | 1/2 Year | 3/4 Year |
| 55 | 2.000% | 2.016% | 2.032% | 2.048% |
CalPERS Basics
CalPERS is a 401(a) defined benefit plan. This means that your retirement benefit amount is determined by a formula and not what you contribute to the plan. To be eligible for service retirement, most CalPERS members must be at least age 50 or 52 with a minimum of five years of CalPERS-credited service. Once you’re eligible and you retire, your benefit is payable for life.
Want to Learn More?
If you’re unsure of your earliest retirement age or benefit factor percentage, or have any other questions about your retirement formula, you can find information on the home page in your myCalPERS account or check with your employer. You can find your benefit factor chart and more information on our Benefit Factor Charts webpage.