The CalSTRS Formula, In One Line
CalSTRS calculates your Defined Benefit pension using a formula that looks intimidating until you break it apart:
Service Credit × Age Factor × Final Compensation = Your Annual Pension
That is it. Three inputs. If you understand what each one means and how you can influence it, you understand almost everything that matters about your pension.
1. Service Credit
This is simply how many years you have worked in a CalSTRS-covered position, measured in fractions of a year based on your work schedule. A full-time teacher working a full school year typically earns 1.0 year of service credit. Part-time or partial-year work earns a proportional amount.
You can also purchase additional service credit in certain circumstances, most commonly to buy back a leave of absence or prior part-time service that was not fully credited.
2. Age Factor
Your age factor is a percentage set by CalSTRS based on your age at retirement, and it is where the biggest planning decisions live. The earlier you retire, the lower your age factor. The longer you wait, up to a cap, the higher it climbs.
Which age factor table applies to you depends on which benefit structure you are under, CalSTRS 2% at 60 or CalSTRS 2% at 62, which is determined by when you were first hired.
See which tier you are in and why it matters →
Members under the 2% at 60 formula who reach 30 or more years of service credit also pick up a career factor, an additional 0.2% added to their age factor up to the maximum. It is a small number on paper that adds up to real money over a 20 or 30 year retirement.
3. Final Compensation
This is your average salary over a specific period, and how it is calculated depends on your tier and years of service. Depending on your situation, it is either your single highest year of earnings or an average of your three highest consecutive years.
Because this number gets multiplied by your service credit and age factor, even a modest difference in final compensation carries through your entire pension calculation, and your entire retirement.
Putting It Together
Say a teacher has 27 years of service credit, an age factor of 2.0%, and final compensation of $95,000. The math looks like this: 27 × 2.0% × $95,000 = $51,300 per year, or about $4,275 a month, before any adjustments.
Change any one input and the number moves. Work two more years and your service credit and possibly your age factor both increase. Retire two years earlier and both move the other direction.
We built a simple calculator using this exact formula if you want to run your own numbers.
Where to Get Your Exact Numbers
This page explains how the formula works. For your specific, current figures, CalSTRS provides a retirement progress report through your myCalSTRS account that shows your actual service credit and estimated benefit under different retirement ages. That is the source of truth. This page, and our calculator, are planning tools to help you understand what is behind those numbers.