CalSTRS Defined Benefit Supplement - Part 2 of 3 - YouTube

Hi, I'm Kristen.

If you've been an active CalSTRS member since January 2001, you have two separate accounts with CalSTRS.

The defined benefit account, and the defined benefit supplement, or DBS account.

Part one of this video described what your DBS account is, and how it's funded.

In part two, we're going to talk about the choices you have at retirement for recieving these funds.

In part three, we'll look at tax considerations.

There are three main choices for disbursement of your DBS account.

Lump sum, annuity payment, or a combination of lump sum and annuity.

If you choose a lump-sum payment, you can have the payment paid directly to you,

or have the payment rolled over into a qualified tax-deferred account, such as a 403(b) or a traditional IRA.

If your DBS account balance is less than $3,500, your choice is limited to the lump-sum distribution.

You would then decide between direct payment and roll over.

You can find your account balance on your annual Retirement Progress Report.

If your account balance is $3,500 or more, you can choose an annuity payment.

Either a lifetime, or a period-certain annuity.

If you choose a period-certain annuity, you can select any number of years between 3 and 10.

You'll receive a benefit every month for the number of years you select and then the benefits stop.

The amount of monthly benefit is directly related to the number of years you select.

If you'd like to receive a lifetime annuity, which is a guaranteed monthly benefit every month for your lifetime,

you will need to know if you currently have, or are going to elect a beneficiary option for your retirement benefit.

If you decide not to elect a beneficiary option, and instead choose the member-only benefit for your retirement,

then you may also choose the member-only annuity for your DBS account.

This will mean that you'll receive a fixed monthly benefit every month for your lifetime.

If you pass away, the benefit stops, and there will not be a continued benefit for another person's lifetime.

If you have, or are going to elect a beneficiary option, then you may choose a beneficiary annuity for your DBS account.

The choices are: 100, 75 or 50 percent beneficiary annuity.

The percentage indicates what percentage of your annuity that your beneficiary will receive when you pass away.

Here's an example. If you chose the 75% beneficiary annuity,

when you pass away, your beneficiary will receive a monthly benefit every month, for the rest of their lifetime.

That will equal 75% of what you had been receiving.

The combination of lump-sum and annuity allows you to take a portion of your DBS account as a lump-sum payment,

and annuitize the remainder; as long as you leave at least $3,500 in the account to be annuitized.

You're encouraged to speak to a tax or financial professional when making this decision,

as everyone's financial situation is different.

And their are variables that should be considered carefully when making important retirement choices.

Watch part three to learn more about tax considerations.

Visit CalSTRS.com or see the Member Handbook to learn more about the payment choices for your DBS account.

And use the DBS annuity tables to determine estimated monthly disbursement choices.

You'll find additional publications, forms, and other resources on CalSTRS.com.

Register for myCalSTRS to access and manage your personal information and view your account balances online.

If you're at least 45 and have at least five years of service credit,

you can use myCalSTRS to review the DBS section of your Retirement Progress Report

and see projected DBS benefit estimates.

Thanks for watching.