When you retire, just about everything in your life changes—from your daily routine to your finances. Instead of receiving a paycheck from UC, you’ll be creating your own paycheck from the money you’ve saved over your working years, as well as other sources, such as the UC Retirement Plan (UCRP) or Social Security. If you’re a long-time UC employee, you might find that your potential retirement income from the UCRP is not that different from your current take-home pay.
Let’s consider three examples.
1. MEET JOE
He’s a staff member with 30 years of service credit, and he’s planning to retire at age 60. He’s earned an average of $60,000 annually in the last three years. His monthly gross salary from UC is $5,000, and we assume that he is married, files jointly, and claims one tax allowance.
In retirement, Joe’s monthly take-home income is slightly less than his working paycheck. But in addition, he’ll have his UC Retirement Savings Program (UCRSP) account balances, CAP (capital accumulation payment) balance, and, once he reaches age 67, Social Security benefits.
2. MEET ANITA
She began a second career with UC more than a decade ago, and she’s planning to retire at age 60. Over the last three years, she’s earned an average of $75,000 annually, and she has 12 years of service credit. Her monthly gross salary from UC is $6,250, and we assume that she has a registered domestic partner and claims one tax allowance.
In retirement, Anita’s monthly take-home income is less than one-third of her working paycheck; however, she’ll have her UCRSP account balances, 401(k) savings and pension benefits from previous employers, and Social Security benefits.
3. MEET FRANK
He joined UC in 1974—before faculty and staff became coordinated with Social Security, so he’s not coordinated with Social Security or Medicare. He’s earned an average of $188,000 annually the last three years, and when he retires at age 65, he’ll have 40 years of service credit. His monthly gross salary from UC is $15,666, and we assume that he is married, files jointly, and claims one tax allowance.
In retirement, Frank’s monthly take-home income is more than his working paycheck. In addition, he’ll have his UCRSP account balances and the balance in his CAP.
How to Estimate Your Own Retirement Income
To estimate your own retirement income, check your Retirement Review, which shows an estimate of your UCRP pension benefit, plus an estimate of your accounts in the 403(b), 457(b), and DC Plans, assuming you retire at age 65.
If you are not eligible for UCRP, the site can estimate your retirement income at age 65 once you enter your annual pay. You may find that you’re on track to have what you need. If not, you may have other sources of income that can make up the difference, such as a previous employer’s plan and Social Security. Also consider ramping up your voluntary contributions to the 403(b) and/or 457(b) Plans.