The Advisor - May 2012


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You Have the Power to Make Good 403(b) and 457 Plan Decisions

The good news for educators is that you have access to voluntary retirement savings plans – 403(b) and 457 plans – to help supplement your CalSTRS or CalPERS pension. But in order to take advantage of them, you need to take action.

Here are some tips to make the most of the retirement savings opportunities available to you.

Check on CalSTRS and CalPERS

Your first step is to get an estimate of your CalSTRS or CalPERS pension. Why? Because you may be surprised to find that your pension is unlikely to provide all the income you will need in retirement. Getting an estimate of what you can expect will help you figure out how much more you need to save to help ensure you’ll be able to support your desired lifestyle in retirement.

The average CalSTRS benefit to new retirees replaces 63% of income.* It’s also important to keep in mind that your CalSTRS earnings do not qualify you for Social Security benefits at retirement. So you will not receive Social Security unless you are eligible due to a spouse’s earnings or earnings from another job on which you paid Social Security taxes. (Even then, your benefit could be reduced due to the Windfall Elimination Provision or Government Pension Offset.)

The average CalPERS member receives 50% or less of their pay in retirement.** CalPERS members do pay Social Security taxes and can expect to receive Social Security benefits. However, given uncertainty over future Social Security benefits, you should still consider voluntary retirement savings plans.

So, what can you expect?

  • Go to and click on the CalSTRS/CalPERS tab at the top of the page. The articles include important information about your CalSTRS or CalPERS benefit, along with links to calculators on their sites.
  • Or go directly to CalSTRS at or CalPERS at

* Source: CalSTRS, “Promises Made, Promises Kept,

** Source: CalPERS,