Back to Basics

In the Oscar-winning film ”Philadelphia”, Denzel Washington’s character, a trial lawyer, has a running line that serves as a proverb of sorts. To cut through complexity and guide viewers to the heart of the matter, he routinely insists that other characters “explain it to me like I’m a six-year old.” In one particularly famous courtroom scene, he similarly prompts his client on the stand, “explain it to me like I’m a four-year old.”

Regardless of whether one’s age is four, six or forty-six, some concepts truly are best conveyed in the simplest of terms.

When it comes to your retirement, you certainly deserve a straightforward explanation of what is taking place. At SBCERA, we strive to provide you with education that is easily understandable. With the recent volatility in financial markets and geopolitical news, you may be wondering what effect all these things have on your retirement.

During times when the investment world seems increasingly complex, it can be helpful to focus on some basic facts about your future retirement from SBCERA:

  1. When you retire, you will be paid a lifetime monthly benefit. Yes, that is lifetime, as in, for the rest of your life. Your benefit amount is determined by your age at retirement, years of service credit, final average compensation and your benefit formula. There are also options for eligible beneficiaries to receive a continuance of your benefit upon your death.
  2. Your benefit amount is not based on the ups and downs of the stock market. Simply stated, market performance is not a factor in calculating your individual benefit. SBCERA is a defined benefit plan, meaning, you are promised a defined retirement benefit that is safeguarded against market volatility. While we do invest in financial markets to grow the SBCERA Trust Fund from which benefits are paid, market swings do not change your benefit calculation.
  3. Your benefit amount is not based on how much you contribute. As an SBCERA Member, you cannot contribute any more, or any less, than your given contribution rate. If you wish to put more money toward your retirement, you may wish to consider, if eligible, also participating in a deferred compensation plan such as a 457(b) or 401(k).
  4. Your benefit may increase in retirement because of cost-of-living adjustments. Cost-of-living adjustments (COLAs) are granted for retired members and beneficiaries based on annual changes in the Consumer Price Index (CPI). The COLA cannot exceed two percent in any given year.
  5. Your benefit will generally be considered taxable income. At retirement, you will be given the option to elect whether to have federal and/or California state taxes withheld from your SBCERA benefit, and you can update your withholding elections anytime thereafter. If you establish primary residence in another state that also has income tax, you will be responsible for withholding and paying taxes for that particular state.

If you have questions about the facts listed above or any other retirement matter, SBCERA is here to help. For general information, you may wish to consider contacting us through the Live Chat feature on Regarding more specific matters, we encourage you to email your questions to, or call us at (909) 885-7980 or toll free at (877) 722-3721.

At SBCERA, it is our job to handle complexity and provide you with facts and information in clear and understandable ways. We understand that prior to retirement, there are many financial considerations for you to weigh, all of which require research and planning. Nonetheless, to guide your retirement decision-making, it is remarkably helpful to get back to basics.