CalPERS Offers Options to Increase Retirement Service Credit Through Purchases

CalPERS members are encouraged to enhance their retirement benefits through strategic service credit purchases, as discussed in a recent meeting by the California Public Employees Retirement System. Members can increase their service credit by working longer, especially if they are under the age at which the benefit factor maxes out. This can lead to a higher retirement benefit, particularly if members receive raises or promotions during their careers.

To assist members in planning for retirement, CalPERS offers a retirement estimate calculator accessible through the myCalPERS account. This tool allows users to explore various scenarios by adjusting final compensation amounts and retirement dates, helping them identify ways to maximize their retirement benefits.

One key strategy highlighted is the option to purchase service credit. Members can buy credit for service prior to their membership, redeposit withdrawn contributions from previous employment, or even purchase military service credit, which can add up to four years. However, it is important to note that while all state and school employers offer this option, public agency employers must specifically contract for it.

For those considering purchasing service credit, CalPERS recommends starting early in one’s career, as costs may be lower and there will be more time to pay off the purchase before retirement. Members can find detailed information and resources, including publications and educational videos, on the CalPERS website.

In addition to understanding service credit options, having a CalPERS special power of attorney is emphasized as a crucial step for members at any stage of their career. This ensures that members can effectively manage their retirement benefits and make informed decisions as they approach retirement.