Ep20: Creating Your Action Plan – 3 Steps to Get Started
Ep20: Creating Your Action Plan – 3 Steps to Get Started
The Day She Calculated Her Future Income
Emily, a 52-year-old teacher in Sacramento, assumed her CalSTRS pension would cover most of her retirement needs.
But when she used the retirement calculator for the first time, she realized her projected benefit was only 55% of her final salary — before taxes and healthcare deductions.
She had planned her entire future on the belief that her pension would replace almost all her income… and the reality shocked her.
What CalSTRS / CalPERS Pension Rules Really Say About Retirement Income (Expertise)
Many California teachers assume a “full pension” equals a “full salary.” It does not.
- The average replacement ratio under CalSTRS is 50–60% of pre-retirement income.
- Retiring before age 63 reduces your benefit significantly through early-retirement factors.
- Pension income does not include Social Security for most California teachers due to the Windfall Elimination Provision (WEP).
- Health insurance after retirement is not guaranteed unless your district provides it — many don’t.
Without a supplemental 403(b), 457, or other savings, most teachers face a retirement income gap.
Authoritative Tools to Quantify the Gap (Government Sources & Calculators)
To understand your real retirement situation, use:
- CalSTRS Pension2 Retirement Calculator → estimates your pension and tax impact
- Social Security WEP Calculator (SSA.gov) → determines whether WEP affects your benefit
- Dept. of Labor Retirement Income Worksheet → measures your monthly gap
- 401k / 403(b) “retirement shortfall calculators” → identify how much extra savings you need
These resources show the income gap clearly — and help teachers plan for it.
How Teachers Can Fill the Retirement Income Gap
1. Contribute to a 403(b) or 457(b) — start small, then increase annually.
2. Model different retirement ages(b) — delaying 1–2 years can increase pension significantly.
3. Review healthcare options — plan for Medicare gaps or district plans.
4. Create a supplemental income bucket through long-term diversified investment strategies.
Want to know your real income gap?
Get a personalized “Teacher Retirement Income Gap Assessment” — using your actual CalSTRS numbers.