CalSTRS Option Elections at Retirement Explained

Editorial note: This page is educational and is not legal, tax, or financial advice. CalSTRS option factors, beneficiary rules, and continuance percentages are set by California statute and by CalSTRS regulations. Confirm your specific factors with your myCalSTRS account and consult a California licensed CPA or attorney before signing your retirement election.

Last updated: August 13, 2026 · By Gold California Editorial

This page explains the retirement payment option elections a CalSTRS Defined Benefit member makes on the Service Retirement Application. It covers the Member-Only Benefit and the four Modified Benefit choices governed by California Education Code section 24300.1: the 100 Percent Beneficiary Option, the 75 Percent Beneficiary Option, the 50 Percent Beneficiary Option, and the Compound Option.

Every figure and statutory reference on this page is cited to the CalSTRS Member Handbook (2026 edition) or to the California Education Code. This is one of the most consequential decisions on a CalSTRS retirement application. The election becomes irrevocable a short time after your first benefit payment is issued.

What a CalSTRS option election is

Every CalSTRS Defined Benefit retiree starts with the same base calculation. Age factor multiplied by years of service credit multiplied by final compensation produces the Member-Only Benefit, per the CalSTRS Member Handbook (2026 edition). That figure is the highest monthly payment the retiree can receive from the Defined Benefit Program.

An option election trades some of that monthly amount for a lifetime continuance paid to a named option beneficiary after the retiree dies. CalSTRS reduces the Member-Only Benefit by an option factor set by the member's age, the beneficiary's age, and the option chosen. The reduced monthly amount is the Modified Benefit.

The election is made on the Service Retirement Application. It becomes effective on the benefit effective date under California Education Code section 24300.1(b) and is nearly irrevocable after a short 30 day change window.

The Member-Only Benefit

The Member-Only Benefit is the default. It pays the full monthly allowance to the retiree for life and stops at the retiree's death. No lifetime continuance is paid to a beneficiary under this election, per the CalSTRS Member Handbook (2026 edition, "Your lifetime monthly benefit" section).

The one-time death benefit and any remaining member contributions and interest are still paid to the retiree's designated one-time death benefit recipient. That death benefit and the option beneficiary designation are two separate CalSTRS mechanisms and should not be confused with each other.

Member-Only suits retirees whose beneficiaries have adequate income from other sources, or retirees with no surviving dependent who would need ongoing monthly income from CalSTRS. It also preserves the full longevity bonus if the retiree qualified for one on or before December 31, 2010.

The Modified Benefit family

The Modified Benefit is a family of four options under California Education Code section 24300.1. Each reduces the Member-Only Benefit by an actuarial factor and continues a portion to one or more option beneficiaries after the retiree dies.

The four choices are the 100 Percent Beneficiary Option, the 75 Percent Beneficiary Option, the 50 Percent Beneficiary Option, and the Compound Option. Each is described in the sections that follow. All Modified Benefit elections take effect on the benefit effective date under Ed Code section 24300.1(b).

Under all three simple options, the CalSTRS Member Handbook (2026 edition) confirms an automatic pop-up feature. If the option beneficiary predeceases the retiree, the monthly benefit rises to the Member-Only amount for the rest of the retiree's life.

100 Percent Beneficiary Option

Under the 100 Percent Beneficiary Option, the option beneficiary continues to receive 100 percent of the retiree's Modified Benefit for life after the retiree dies, per Ed Code section 24300.1(a)(1). This is the largest continuance available among the simple options.

Because CalSTRS must fund the largest promised continuance, this option produces the largest reduction to the Member-Only Benefit at retirement. In the Member Handbook worked example, a member and beneficiary both age 60 use an option factor of .9031, so the Modified Benefit runs about 90.31 percent of the Member-Only Benefit.

The 100 Percent Beneficiary Option includes the automatic pop-up. If the beneficiary dies before the retiree, the monthly amount rises back to the Member-Only Benefit under the CalSTRS Member Handbook (2026 edition, "Your lifetime monthly benefit" section).

75 Percent Beneficiary Option

Under the 75 Percent Beneficiary Option, the option beneficiary continues to receive 75 percent of the retiree's Modified Benefit for life after the retiree dies, per Ed Code section 24300.1(a)(2). The monthly reduction to the Member-Only Benefit sits between the 100 percent and the 50 percent choices.

The 75 Percent Beneficiary Option carries a federal age restriction. Under Internal Revenue Code section 401(a)(9), a nonspouse option beneficiary cannot be more than exactly 19 years younger than the member, per Ed Code section 24300.1(a)(2). The restriction does not apply if the beneficiary is the member's spouse or former spouse with a community property interest.

In the Member Handbook worked example, a member and beneficiary both age 60 use an option factor of .9306, so the Modified Benefit runs about 93.06 percent of the Member-Only Benefit. The automatic pop-up applies here as well if the beneficiary predeceases the retiree.

50 Percent Beneficiary Option

Under the 50 Percent Beneficiary Option, the option beneficiary continues to receive 50 percent of the retiree's Modified Benefit for life after the retiree dies, per Ed Code section 24300.1(a)(3). This produces the smallest monthly reduction among the three simple Modified Benefit options.

The Member Handbook worked example lists an option factor of .9549 for a member and beneficiary both age 60. In that scenario, the Modified Benefit runs about 95.49 percent of the Member-Only Benefit while both are living, and 50 percent of that Modified Benefit continues to the beneficiary after the retiree's death.

The 50 Percent Beneficiary Option also includes the automatic pop-up. If the beneficiary dies before the retiree, the monthly amount rises back to the Member-Only Benefit under the CalSTRS Member Handbook (2026 edition).

Compound Option

The Compound Option is a flexible design under Ed Code section 24300.1(a)(4). It allows a member to name multiple option beneficiaries, or one option beneficiary plus a portion of the allowance that stays as Member-Only, or several beneficiaries with different option percentages assigned to each.

The retiree specifies what percentage of the unmodified allowance each component covers. The sum of the specified percentages plus any Member-Only retained portion must equal 100 percent, per Ed Code section 24300.1(a)(4)(B). Each component uses one of the 100, 75, or 50 percent choices under Ed Code section 24300.1(a)(4)(C).

Federal age restrictions apply inside a Compound Option. A nonspouse beneficiary under the 100 percent component cannot be more than exactly 10 years younger than the member. A nonspouse beneficiary under the 75 percent component cannot be more than exactly 19 years younger. Both caps come from Ed Code section 24300.1(a)(4)(C) and Internal Revenue Code section 401(a)(9).

Modified Benefit options at a glance

The table below summarizes the five paths on the CalSTRS Service Retirement Application. Each Modified Benefit reduces the Member-Only Benefit by an option factor tied to the member and beneficiary ages at retirement, per the CalSTRS Member Handbook (2026 edition).

Source: California Education Code section 24300.1 (Optional Settlement definitions, IRC 401(a)(9) age restrictions, 30 day change window); CalSTRS Member Handbook (2026 edition, "Your lifetime monthly benefit" and "Beneficiary option examples and worksheets" sections). Checked August 2026 at leginfo.legislature.ca.gov and calstrs.com/files/MemberHandbook2026.pdf.

How the option factor is set

Every Modified Benefit reduces the Member-Only Benefit by an actuarial option factor. That factor depends on three inputs: the member's age at retirement, the option beneficiary's age at retirement, and the option chosen, per the CalSTRS Member Handbook (2026 edition, "How choosing an option changes your benefit" section).

Age is measured to the nearest quarter year on the effective date of retirement. If the member elected the option before retirement under a preretirement election of an option, CalSTRS uses the higher of the option factor in effect at the preretirement election date and the factor in effect at retirement. In most cases this produces a higher Modified Benefit.

The full option factor tables live in the CalSTRS Member Handbook (2026 edition, "Service retirement option factor tables" section). For a personalized estimate, members can use the CalSTRS Retirement Benefits Calculator at calstrs.com or request an estimate through myCalSTRS before signing the Service Retirement Application.

Why the election is irrevocable

California Education Code section 24300.1(c) states that a member may revoke or change an option election no later than 30 days from the date CalSTRS pays the member's initial benefit payment under the Defined Benefit Program. After that window, the election is irrevocable.

Ed Code section 24309 sets a parallel 30 day change window that applies to a preretirement election of an option under section 24307. In both cases, the election locks in at or shortly after the benefit effective date and cannot be revoked outside the statutory exceptions.

The irrevocability protects the actuarial soundness of the CalSTRS Defined Benefit fund. The reduction that CalSTRS applied to the Member-Only Benefit was priced against the specific beneficiary named at retirement. Allowing free changes years later would create a selection risk against the plan.

The pop-up if your beneficiary predeceases you

All three simple Modified Benefit options include an automatic pop-up feature. If the option beneficiary dies before the retiree, the retiree's monthly benefit rises to the Member-Only Benefit for the rest of the retiree's life, per the CalSTRS Member Handbook (2026 edition, "Your lifetime monthly benefit" section).

The pop-up does not require an election. It is an administrative feature CalSTRS applies once the retiree notifies CalSTRS of the beneficiary's death and submits a copy of the death certificate. The Member Handbook is explicit that the retiree must send notification even if the retiree does not intend to name a new option beneficiary.

This automatic pop-up is a key structural difference from the CalPERS plan. Under CalPERS, Options 2 and 3 have no pop-up, and a retiree who wants one at CalPERS must specifically elect Option 2W or Option 3W under Government Code sections 21456 or 21457. Under CalSTRS section 24300.1, the pop-up is built into every simple option.

Post-retirement changes to the option

Outside the 30 day change window, an option election can only be changed under specific statutory events. The CalSTRS Member Handbook (2026 edition, "Adding, changing or canceling your option election after retirement" section) sets four narrow paths.

The first path is the death of the option beneficiary. If the original option beneficiary dies after the effective date of retirement, the retiree's benefit rises to the Member-Only Benefit through the automatic pop-up, and the retiree may then elect a new option beneficiary. The new election is effective six months after CalSTRS receives it, and the retiree must keep the same option type held before the beneficiary's death.

The second path is divorce. Under Ed Code section 24322, a retiree may cancel an option if the beneficiary is the retiree's current or former spouse or registered domestic partner. A final decree of dissolution or judgment of nullity must have been entered on or after January 1, 1978. The retiree may then take the Member-Only Benefit or elect a new option under Ed Code section 24300.1.

The third path is a new marriage or registered domestic partnership after retirement. Under Ed Code section 24321, a retiree who was unmarried or unregistered at the benefit effective date and took a Member-Only Benefit may elect a Modified Benefit naming the new spouse or partner as the option beneficiary. The retiree must have been married or registered for at least one year, cannot elect the Compound Option, and the new election is effective six months after CalSTRS receives it.

The fourth path is a change from a nonspouse beneficiary to the retiree's spouse. Under Ed Code section 24320, a retiree may cancel an option that named someone other than a current or former spouse and designate the spouse as the new option beneficiary. The Compound Option cannot be selected under this path, and the new election is effective six months after CalSTRS receives it.

Legacy Options 2, 3, 4, 5, 6, 7, and 8

Retirements effective before January 1, 2007 used a different menu under California Education Code section 24300. Those legacy options are numbered 2, 3, 4, 5, 6, 7, and 8. They cannot be newly elected by a member retiring today but remain in effect for retirees who elected them under the old law.

Under section 24300, Option 2 continues 100 percent of the Modified Benefit to one beneficiary, Option 3 continues 50 percent, and Options 4 and 5 continue two-thirds or one-half after the first death of either the retiree or the beneficiary. Options 6 and 7 mirror the modern 100 or 50 percent choices, and Option 8 is a multiple-beneficiary compound design.

The CalSTRS Member Handbook (2026 edition) notes that a legacy retiree whose Option 2, 3, 4, or 5 beneficiary predeceases them may elect a new joint and survivor option under Ed Code section 24300.1. Legacy retirees under Option 6, 7, or 8 who lose a beneficiary must keep the same option type and the same percentage allocation.

How to think through your CalSTRS election

The steps below outline the general process a California CalSTRS Defined Benefit member uses to compare the Member-Only Benefit and the four Modified Benefit options and to file the Service Retirement Application. They describe the mechanics only. Discuss the specifics with CalSTRS and a California licensed CPA or fiduciary planner before signing.

1. Request a CalSTRS retirement estimate. Log in to myCalSTRS and generate an estimate that lists the Member-Only Benefit and each Modified Benefit option side by side, at your intended retirement date and with your intended beneficiary. Confirm the estimate uses the most recent CalSTRS actuarial factors.
2. Identify who needs monthly income from your CalSTRS benefit after your death. If nobody depends on you, the Member-Only Benefit may fit best. If a spouse, registered domestic partner, adult child with a disability, or other dependent needs ongoing monthly income, one of the Modified Benefit options may be appropriate.
3. Compare the monthly reduction to the value of the future continuance. Weigh the size of the option factor reduction against the promised continuance percentage. A younger beneficiary produces a larger reduction because the expected continuance runs longer.
4. Check the federal age restrictions on nonspouse beneficiaries. The 75 Percent Beneficiary Option limits a nonspouse beneficiary to no more than 19 years younger. The 100 Percent Beneficiary Option component of the Compound Option limits a nonspouse to no more than 10 years younger, per Ed Code section 24300.1 and IRC section 401(a)(9).
5. Decide whether a Compound Option fits better than a simple option. If you want to split the continuance between two beneficiaries or leave part of the allowance as Member-Only, request a Compound Option estimate. Each Compound component uses a 100, 75, or 50 percent choice.
6. Confirm the effect on any longevity bonus and Defined Benefit Supplement account. The CalSTRS Member Handbook (2026 edition) notes that a longevity bonus is partially reduced if you elect an option or if your option beneficiary predeceases you. Ask CalSTRS to model the annuity choice for your Defined Benefit Supplement balance if it is 3,500 dollars or more.
7. File the Service Retirement Application and diary the 30 day change window. Under Ed Code section 24300.1(c), you have 30 days from the date CalSTRS issues your first benefit payment to revoke or change the election. After that window, the election is irrevocable subject only to the narrow statutory exceptions.

None of these steps replaces professional advice. A California licensed CPA or fiduciary planner can model each option against your household tax and cash-flow picture before you sign the Service Retirement Application.

When this page does not answer your question

This page covers the CalSTRS Defined Benefit option elections at retirement. It does not cover several adjacent topics that a reader might expect to find here.

• Preretirement death benefits. If a CalSTRS member dies before the benefit effective date, a separate set of family and survivor benefits apply under other Education Code sections. Those are not option elections.
• Disability retirements. A CalSTRS member on a Disability Retirement or Disability Allowance still elects a benefit distribution, but the underlying allowance rules differ from service retirement.
• Defined Benefit Supplement annuities. The lifetime annuity choices for the Defined Benefit Supplement account (100 percent, 75 percent, 50 percent, period-certain) parallel the Defined Benefit options but are a separate election governed by different Education Code sections.
• CalPERS, UC, and the 1937 Act county systems. The California Public Employees' Retirement System, the University of California Retirement Plan, and the county systems governed by the County Employees Retirement Law of 1937 have their own option elections. The rules on this page apply only to CalSTRS.
• Federal and California income tax on the payments. Taxation of CalSTRS retirement payments follows the Internal Revenue Code and the California Revenue and Taxation Code. Discuss with a California licensed CPA how each option interacts with your household tax picture.

None of these situations replaces professional advice. Consult CalSTRS, a California licensed attorney, or a fiduciary planner for facts specific to your case.

CalSTRS option elections, answered

Can I change my CalSTRS option after retirement?

Generally no. California Education Code section 24300.1(c) states that a member may revoke or change an option election no later than 30 days after CalSTRS issues the initial benefit payment under the Defined Benefit Program. After that window, changes are limited to the death of the beneficiary, divorce, remarriage, or the specific spouse-designation path under Ed Code sections 24320, 24321, 24322, and the Member Handbook.

What is the difference between the 100 Percent and the 75 Percent Beneficiary Option?

The 100 Percent Beneficiary Option continues the full Modified Benefit to the beneficiary after the retiree's death. The 75 Percent Beneficiary Option continues 75 percent of that Modified Benefit. Because the promised continuance is smaller, the 75 percent option produces a smaller monthly reduction to the Member-Only Benefit. The 75 percent option also carries a federal 19 year age limit for a nonspouse beneficiary under IRC section 401(a)(9).

Does my monthly benefit go back up if my option beneficiary dies first?

Yes. All three simple Modified Benefit options include an automatic pop-up. If the option beneficiary dies before the retiree, the retiree's monthly benefit rises to the Member-Only Benefit, per the CalSTRS Member Handbook (2026 edition). The retiree must notify CalSTRS and send a copy of the death certificate for the pop-up to be processed.

What is the Compound Option and when is it useful?

The Compound Option under Ed Code section 24300.1(a)(4) allows a member to name multiple option beneficiaries or to combine a Modified Benefit with a Member-Only portion. Each component uses a 100, 75, or 50 percent choice. It is useful for a retiree who wants to provide continuance to two beneficiaries such as a spouse and an adult child, or to retain part of the allowance as Member-Only.

Do I have to be married to elect a Modified Benefit?

No. The option beneficiary under the 100, 75, or 50 Percent Beneficiary Options can be a natural person other than a spouse, such as an adult child, registered domestic partner, sibling, or another named person, or a qualifying special needs trust. Federal age restrictions apply to nonspouse beneficiaries under the 75 percent option and the Compound Option, per Ed Code section 24300.1 and IRC section 401(a)(9).

How much younger can a nonspouse option beneficiary be?

Under the 75 Percent Beneficiary Option, a nonspouse beneficiary cannot be more than exactly 19 years younger, per Ed Code section 24300.1(a)(2). Under the Compound Option, the 100 percent component caps a nonspouse at 10 years younger, and the 75 percent component caps a nonspouse at 19 years younger, per Ed Code section 24300.1(a)(4)(C). Both caps implement Internal Revenue Code section 401(a)(9) and do not apply to a spouse or a former spouse with a community property interest.

What happens to my longevity bonus if I elect an option?

The CalSTRS Member Handbook (2026 edition, "CalSTRS 2 Percent at 60 benefit enhancements" section) states that the longevity bonus is partially reduced if a member elects an option. The bonus is also partially reduced if a preretirement election of an option is canceled or if the option beneficiary predeceases the retiree. Only members who earned at least 30 years of qualified service credit on or before December 31, 2010 receive a longevity bonus.

Can I still elect one of the old CalSTRS Options 2 through 8?

No. Retirements effective on or after January 1, 2007 use the four Modified Benefit choices under Ed Code section 24300.1. The legacy Options 2, 3, 4, 5, 6, 7, and 8 under Ed Code section 24300 remain in effect for pre-2007 retirees but cannot be newly elected today. Legacy retirees who lose a beneficiary may elect a new option under section 24300.1 in specific situations described in the CalSTRS Member Handbook (2026 edition).