Retirement – 30 years @ 3%=90% not really
Although you may not realize it, when you put in for your retirement, you have some decisions to make that will effect your retirement check if you have a spouse and family to consider. You can obtain the retirement info from your personnel office or you can obtain it online at CalPERS. If you select the unmodified allowance, you will receive the 90% that you expected. If you opt for one of the other options, then you can expect to see about 85-87% rather than 90%. A small cost to be sure that your spouse and family have an income after you are gone.
You need to look at the CalPers Pre-Retirement Check List
Link to Guide to Retired Member Death Benefits
The info below was written in 2005, so it may need to be updated.
Your Options at Retirement
At retirement, you can choose to receive the highest benefit payable, which is referred to as the “Unmodified Allowance.” The Unmodified Allowance provides a monthly benefit to you that ends upon your death. You also have the choice of requesting a reduction in the Unmodified Allowance to provide a lump-sum or monthly benefit for a beneficiary upon your death. This section gives you an overview of various options available to you at retirement.
Option 1
This retirement option provides a lump-sum payment of your remaining member contributions to your beneficiary after your death. The reduction to your monthly benefit to provide this payment is based on your life expectancy at retirement and the amount of your contributions. You may name one or more beneficiaries, and you may name a new beneficiary at any time. If you name someone other than your spouse or registered domestic partner as your Option 1 beneficiary(ies), upon your death your spouse or domestic partner may still be entitled to a community property share of any remaining contributions. (From my point of view, this is a terrible option. I would not want to leave my wife homeless, because if I still have a house payment upon retirement, her lump sum would not be enough to pay off the house, and she would no longer have an income unless she has her own retirement.)
The following options, 2, 2W, 3, 3W, and 4, provide lifetime monthly benefits to your designated beneficiary. The reduction to your monthly benefit to provide a monthly allowance to your beneficiary is based on both your life expectancy at retirement and your beneficiary’s – the younger your beneficiary; the greater the reduction. If you have someone eligible for Survivor Continuance, the reduction is applied only to the option portion of your allowance. (See CalPers for more about Survivor Continuance.) In most cases, you may name only one beneficiary, and your designation may not be changed after retirement except under limited circumstances.
Option 2
Under Option 2, your beneficiary will continue to receive the same total monthly payment you receive after retirement. If your beneficiary predeceases you, your retirement allowance will increase to the Unmodified Allowance.
Option 2W
This option provides a slightly higher allowance for you and your beneficiary than Option 2, however, if your beneficiary predeceases you, you continue to receive the Option 2W amount rather than increasing to the Unmodified Allowance.
Option 3
If you choose Option 3, your beneficiary will receive a monthly allowance equal to one-half the amount of your retirement allowance. If your beneficiary predeceases you, your allowance will increase to the Unmodified Allowance.
Option 3W
This option provides a slightly higher allowance for you and your beneficiary than Option 3, however if your beneficiary predeceases you, you continue to receive the Option 3W amount rather than increasing to the Unmodified Allowance.
Option 4
Option 4 is a somewhat flexible option. There are several unique variations of Option 4, each specially designed to mesh with various situations that might apply to you. If you are interested in choosing a lifetime option, you should familiarize yourself with these options by obtaining the CalPERS publication Retirement Option 4. The amount payable to your beneficiary under Option 4 cannot exceed the amount payable under Option 2W.