Decision Guide: What Should Teachers Do With a CalSTRS Pension?
California teachers often have a strong pension foundation, but they still face important decisions about 403(b), 457, and retirement income planning.
What a Pension Does Well
- provides foundational retirement income
- creates long-term stability
- reduces reliance on investment withdrawals
What a Pension Does Not Solve
- inflation pressure over time
- income flexibility
- large one-time expenses
- retirement lifestyle goals beyond basic coverage
How 403(b) and 457 Plans Fit In
These plans can supplement a pension and create a “second retirement paycheck,” especially when investment fees and allocation are handled carefully.
Common Mistakes Teachers Make
- ignoring vendor fees
- not coordinating pension with other savings
- treating 403(b) and 457 decisions separately
- not reviewing retirement income early enough