For City of San José employees
Your San José pension works differently. Your retirement plan should, too.
City service isn’t covered by Social Security, your tier depends on your hire date, and retiree health rules vary by tier. We help Federated, Police, and Fire members within ten years of retirement see how the pension, deferred compensation, and health coverage fit together, so you can move confidently ahead.
Plans and tiers differ. We always start from your official Office of Retirement Services documents.
No Social Security from your City job? A 2025 law may still raise your benefit.
San José employees don’t pay into Social Security for City service. But if you or your spouse earned Social Security from other work, the Social Security Fairness Act, signed January 5, 2025, ended the WEP and GPO rules that used to reduce those benefits.
Review your earnings record at ssa.gov, then let’s build the real number into your plan.
Talk it through with usFind your tier
Your hire date sets your tier. Your tier shapes everything else.
Choose your retirement plan and when you were hired to see the highlights from the City’s fact sheets.
Your retirement plan
You were hired
Your tier
Plan for this:
Want your tier’s numbers run against your own dates?
Schedule a ConversationBridging the gap years
Your pension is the foundation. Your 457 and VEBA can be the bridge.
Many City employees can retire well before Medicare and, depending on tier, before full pension age. These are the pieces that carry you through.
457 withdrawals without the 10% penalty
Under IRS rules, governmental 457(b) withdrawals after you leave City service aren’t subject to the 10% early-withdrawal tax, even before 59½. They’re still taxed as income, and money rolled in from other plans or IRAs keeps its original rules.
A VEBA for health costs
Tier 2 members contribute to a VEBA, an account that can reimburse eligible health care costs in retirement on a pre-tax basis. For Federated Tier 2B, which has no City medical coverage in retirement, it’s a key part of the health plan.
Medicare at 65
Federated members in City retiree health must enroll in Medicare Parts A and B at 65. Because City work isn’t covered by Social Security, confirm your Medicare Part A eligibility with Social Security well before then.
2026 at a glance
Limits reset every year, and 2026 brought a new rule for higher earners’ catch-up contributions. If you’re within a few years of retiring, this is also the income Medicare looks back on.
- 457(b) employee contribution limit$24,500
- Catch-up contribution, age 50+Ages 60–63 may contribute up to $11,250 instead$8,000
- Roth catch-up wage thresholdIf your 2025 FICA wages from the City exceeded this, catch-ups must be Roth$150,000
- Medicare surcharge (IRMAA) begins aboveSingle / joint, based on income from two years earlier$109K / $218K
- New senior deduction, age 65+2025 through 2028, per person; shrinks above $75K single / $150K joint income$6,000
- WEP and GPO reductionsEnded by the Social Security Fairness Act in January 2025Repealed
Figures reflect 2026 IRS and Medicare limits and are subject to change.
Sources: City of San José Office of Retirement Services fact sheets and handbooks; Social Security Administration; IRS Notice 2025-67 and IRS.gov guidance on catch-up contributions, early distributions, and the enhanced deduction for seniors.
Common questions
Questions City employees often have.
Do City of San José employees get Social Security?
Not for City service. The City’s retirement handbook notes that employees don’t contribute to Social Security and don’t earn Social Security credit for City work; only the Medicare portion is withheld. You may still qualify through other jobs or a spouse, and since the Social Security Fairness Act, those benefits are no longer reduced by WEP or GPO.
How do I know which tier I’m in?
Your plan and hire date decide it. For example, Federated employees hired on or before September 29, 2012 are generally Tier 1, and those hired on or after September 30, 2012 are Tier 2. Use the tier finder above, then confirm with the Office of Retirement Services.
What is the VEBA, and how do I use it?
A VEBA is an account that Tier 2 members contribute to, which can reimburse eligible health care costs in retirement on a pre-tax basis. For Federated Tier 2B members, who don’t receive City medical coverage in retirement, it’s an important part of the health plan.
Can I use my 457 before age 59½?
Generally, yes, once you’ve left City service. Governmental 457(b) withdrawals aren’t subject to the 10% early-withdrawal tax, though they’re still taxed as income. Money rolled into the 457 from other plans or IRAs keeps its original rules.
What happens to my health coverage at 65?
If you’re in City retiree health coverage, Federated rules require enrolling in Medicare Parts A and B at 65. Because City work isn’t covered by Social Security, confirm your Medicare Part A eligibility with Social Security well before then.
Do you work with City employees and retirees outside San José?
Yes. We’re based in San Jose and work with City employees and retirees here and virtually across the country.
The CLEAR Approach
Most advisors start with your money. We start with what your money is for.
Connect
We begin with the life you want in retirement and the people you're planning for.
Look at everything
Plan statements, health coverage, deferred compensation, and Social Security, side by side.
Engineer your plan
Income, tax, and timing decisions modeled together rather than one at a time.
Act with accountability
Elections, rollovers, and paperwork completed in the right order.
Review and refine
Your plan is revisited as rules, markets, and your life change.
Ready for the next step?
Let’s start with a conversation.
You’ve spent a career serving San José. Book a 30-minute initial conversation to share where you are, talk through the decisions ahead, and see whether we’re the right fit. By phone, video, or in person, whichever works best for you.
Helpful to have, but not required:
- Your latest retirement estimate or statement
- Your 457 deferred compensation statement
- Your Social Security statement from ssa.gov
- A rough idea of when you’d like to retire
Prefer to write instead? Send us a note
Crescent Capital Planning is not affiliated with, endorsed by, or sponsored by the City of San José, its Office of Retirement Services, the Federated City Employees’ Retirement System, the Police and Fire Department Retirement Plan, or any employee bargaining unit. Names are used for identification purposes only.
Plan features described on this page are general summaries drawn from Office of Retirement Services fact sheets and handbooks and may vary by tier, bargaining unit, hire date, and employment status. The San José Municipal Code and official plan documents govern. Figures reflect 2026 IRS and Medicare limits and are subject to change.
This material is for educational purposes only and is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation.