Retirement Benefits

How Your CalPERS Retirement Is Calculated

Retirement Formula

It may not be tomorrow, or even within the next 5, 10, or 20 years, but at some point, you’re probably hoping to receive a CalPERS pension.

But do you even know how your pension is calculated?

Having an idea will help you plan for retirement so you can maintain your same quality of life once you’re through working.

Let’s look at how your CalPERS retirement is calculated and resources to keep you on track.

The Basics: The Retirement Benefit Formula

The key to calculating your retirement benefit is a formula (pictured above), which includes your total service credit, your age at retirement, and your highest average annual compensation during any consecutive 12- or 36-month period throughout your CalPERS career.

Not all member formulas look the same. Your formula is based on your classification, membership category, and employer contract provisions. To find your membership information, log in to my|CalPERS.

Key Factor #1: Service Credit

To retire you must meet two requirements: age and service credit. Your minimum retirement age depends on your retirement formula. The minimum service credit is 5 years, or 10 years if you are a State of California Second Tier member.

Service credit is earned on a fiscal year basis, which is July 1 through June 30. If you are paid on a monthly basis, 10 months of full-time employment will equal one year. Log in to my|CalPERS for your personalized information.

What’s more, you may be able to increase your total service credit through sick leave or educational leave, golden handshake, and service credit purchase. Visit our website to learn about purchasing service credit.

Learn more basics about the retirement calculation in this CalPERS Quick Tip:

Key Factor #2: Your Benefit Factor

Your benefit factor, also known as “age factor,” is the percentage of pay you’ll receive for each year of service credit earned. It is determined by your retirement formula and age at retirement.

This portion of the formula is a bit more complicated, so watch a couple minutes of this online webinar for details and examples:

Explore Your Possibilities: The Retirement Estimate Calculator

Want to get an idea of what your benefits might look like when you retire? You can do just that using our online Retirement Estimate Calculator.

You can also run a more specific estimate calculation based on your latest CalPERS data through your my|CalPERS account. And, if you’re within a year of retirement, you can also request official estimates to determine what your final benefit compensation will be through my|CalPERS.

Learn more about the Retirement Estimate Calculator in this CalPERS Quick Tip:

Learn More: Education Opportunities and Materials

Whether retirement is in the near future or many years away, get started learning about your benefits today. We offer free online and instructor-led classes at each of our eight Regional Offices throughout California. You can learn about your CalPERS benefits, how to apply for retirement, and much more. View specific classes on the Member Education page of our website.

You can also speak one-on-one with experts and attend classes with our free CalPERS Benefits Education Events, held throughout the state for members at all stages of their careers. View upcoming events on our online Calendar.

And if you want to dig in on your own, our online publication Planning Your Service Retirement can help you plan for your service retirement and provide information on what you need to consider before retiring.

Quick Tip Videos

We’ve created a series of videos to help you understand your benefits. Check out all of our CalPERS Quick Tips on our YouTube channel.