This page uses javascript to help render elements, if you have problems please enable javascript.
 
Skip to main content
 
 
 
 
 
You are now inside the main content area

Financial Planning for Retirement

Financial planning for retirement should begin well before your retirement date. As a CSU retiree you will receive retirement income from both CalPERS opens in a new window and Social Security opens in a new window, as well as health benefits in retirement. Whether or not this income is sufficient for you and your dependents — if any — to live securely in retirement depends on many factors including how long you live, the state of your health (or that of your dependents), the possible need for long-term care, etc.

Since everyone’s situation is different, it is impossible to make specific recommendations. It is an excellent idea to consult with an independent financial planner as early as possible to position your assets optimally for retirement. Truly independent financial planners receive income only from the fees that they charge and do not sell any financial products such as investments, insurance or annuities. To guarantee you are working with a truly independent financial planner, choose one who is a member of NAPFA opens in a new window (National Association of Personal Financial Advisors). Discuss the issue of the possible need for long-term care with your financial planner.

Take part in one of the “Planning for Retirement” workshops offered by CalPERS or CSUF’s Office of Human Resources, Diversity and Inclusion before your retirement date. These workshops explain in detail all of the options you have relating to how you receive your CalPERS annuity. You will receive your CalPERS retirement annuity when you retire, but may choose to delay the start of Social Security retirement benefits depending on age at retirement and whether or not you plan to work in the Faculty Early Retirement Program (FERP). Contact Social Security approximately 90 days before you wish to begin collecting your retirement benefits.

Note that people in FERP are retired and receive their CalPERS retirement annuity and their teaching salary while they are teaching. Those in FERP do not pay Social Security taxes on their FERP income, and those who have been in continuous active service with the CSU since before April 1, 1986, also pay no Medicare Tax on their FERP earnings.  Those in FERP should be aware the combination of their FERP income and their CalPERS retirement annuity may place them in a higher tax bracket and that the standard deductions for state and federal income taxes from both sources of income may not be sufficient to cover their annual tax bill.

Note also that while the Social Security cost-of-living adjustment is made at the beginning of each calendar year, the cost-of-living adjustment for your CalPERS pension does not begin until your second year of retirement. In addition, different rules apply for how the CalPERS pension COLA is calculated. More information about this is available on the CalPERS opens in a new window website.  (Insert COLA in the search box to find the COLA fact sheet.)

The links on the left take you to more detailed discussions of these issues. The California State University Emeritus and Retired Faculty and Staff Association opens in a new window (CSU-ERFSA) has some excellent pre-retirement planning information on its website.