Are Your State of California Retirement Benefits Enough?
- Lailah Mo
- Nov 7, 2025
- 3 min read
Updated: Dec 3, 2025
If you work for the city or state, you might be contributing to CalPERS, depending on your eligibility. Membership is mandatory only for those who meet specific criteria, such as full-time employment for over six months or part-time work (50% or more) for one year. Other employees, like some part-time or temporary staff, may have different eligibility rules or work for an agency with a different retirement system.
Understanding State of California Retirement Benefits
Most retirees discover that their pension isn’t enough to cover their expenses. That’s why many employees look for additional products to fill the gap. Let’s explore some of these options together.
While the California public employees retirement fund is a good start, it's typically not sufficient. To fill in the gaps, please call me so we can *chat here.
Calculating Your Retirement Amount
Let’s break down how to calculate your CalPERS retirement benefit. The formula involves three key factors: service credit, benefit factor, and final compensation.
For example, if you are retiring under the "2% at 55" formula with 25 years of service and a final compensation of $4,500 per month, your calculation would look like this:
25 (years) x 0.02 (2% benefit factor) x 4,500 (final compensation) = $2,250 per month.
Understanding the CalPERS Retirement System
It’s important to note that your CalPERS retirement formula may vary based on your career. Therefore, it’s best to log in to your CalPERS account for specific details. Generally, most people earn anywhere from 25% to 55% less in retirement than they did while working.
Now, imagine taking a 50% pay cut in retirement. How would that impact your lifestyle and financial security during your golden years?
While the state employees' retirement system provides a foundation, it often leaves individuals needing more. So, what are your options for enhancing your retirement savings?
Exploring Retirement Savings Accounts
When planning for retirement, consider these factors:
Tax-deferred or tax-exempt retirement products: Understanding the tax implications can significantly affect your savings.
Volatile vs. safe retirement accounts: Your risk tolerance will guide your investment choices.
Employees typically invest in 401(k), 457, or 403(b) plans, depending on their career and available options. However, these accounts can be volatile and are influenced by market fluctuations.
Retirement accounts like the indexed annuity can offer growth with minimal to no risk. If you’re considering larger annual investments, starting at around $25,000, you might want to explore this tax-free retirement account.
The Importance of Living Benefits
Another crucial aspect to consider is protecting yourself against critical illnesses such as heart attacks, cancer, or strokes. Medical expenses can rise significantly as you age, making it essential to have adequate protection.
If, God forbid, you face a heart attack or another serious illness, wouldn’t it be beneficial to receive a check for $50,000, $100,000, or more? This financial cushion can help cover medical bills and other expenses, providing peace of mind during challenging times.
Creating a Comprehensive Retirement Strategy
To ensure you are fully prepared for retirement, it’s vital to create a comprehensive strategy. This plan should encompass various elements, including:
Life Insurance: Protect your family and ensure they are financially secure in your absence.
Retirement Planning: Develop a clear roadmap for your retirement years, including savings goals and investment strategies.
Health Insurance: Consider options that cover potential medical expenses in retirement.
Estate Planning: Make sure your assets are distributed according to your wishes and that your loved ones are taken care of.
Taking Action for Your Financial Future
At Top Financial Agency, we are dedicated to helping you take control of your financial future. Whether you want to protect your family with life insurance, build a tax-free retirement plan, grow your wealth, or secure your legacy, we show you how to make your money work smarter for you.
Our mission is to empower you to be prepared for the unexpected, protect what you’ve earned, fund your children’s education, and unlock new opportunities for long-term wealth. With customized strategies in life insurance, retirement planning, health insurance, and estate planning, we help you leverage your assets today to create lasting security and prosperity tomorrow.
Ready to take the next step? Book a consultation with us today! We offer convenient virtual or phone consultations serving all of the U.S. Don’t wait—your financial future is too important!
Comments