Pension Calculator
Estimate your pension from a typical formula — years of service × a benefit multiplier × your final average salary — and see how much of your income it replaces.
Example: with Final average salary $80,000 · Years of service 30 yrs · Benefit multiplier 1.5% → Annual pension: $36,000.
- Monthly pension$3,000
- Income replaced45% of final salary
- vs the retirement targetBelow the 70–80% target — add Social Security and savings
Computed by the calculator below using its default values. Change any input to see your own numbers.
Where you land
Lump sum vs. monthly pension
Single-life vs. joint-and-survivor
Should you work longer?
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Learn moreHow pensions are calculated
Most defined-benefit pensions use a formula: years of service × a multiplier × final average salary. A 1.5–2% multiplier is common. Thirty years at 1.5% replaces about 45% of salary; at 2% it’s 60%. Add Social Security and personal savings to reach the 70–80% of pre-retirement income most planners target. Check whether your plan adjusts for inflation.
How it’s calculated & sources
Annual pension = final average salary × years of service × multiplier. Replacement ratio = pension ÷ final salary. Compared to the 70–80% retirement-income target.
Lump sum vs. monthly pension: the lump sum is compounded at your stated investment return over the comparison horizon. The monthly pension is treated the same way for an apples-to-apples comparison: each year’s annual pension amount (12 × monthly, increased by your COLA % each year) is assumed to be received and then hypothetically reinvested at your investment return through the end of the horizon, and all of those future values are summed year by year. Single-life vs. joint-and-survivor: the survivor amount is simply the joint-and-survivor payment × the survivor benefit percentage. Work longer: each option’s total lifetime payout is monthly pension × 12 × the number of years from that option’s retirement age to your life expectancy, undiscounted.
Benchmark: the 70–80% income-replacement target for retirement; typical pension multipliers run ~1.5–2% per year of service.
Results update as you type and are general estimates, not personalized advice. Verify with a professional.
For the lump-sum-vs-monthly comparison: a $300,000 lump sum grown at a 6%/yr return for 25 years reaches about $1,287,561. A $2,000/mo pension with a 2%/yr COLA, with each year’s payment hypothetically reinvested at that same 6%/yr return through year 25, totals about $1,590,759 — so in this example the monthly pension is worth roughly $303,198 more over the horizon.
Frequently asked questions
What is a pension multiplier?
The percent of salary you earn per year of service — often 1.5–2%. Higher multipliers mean a larger pension.
Is a pension enough to retire on?
Usually not alone — most replace 40–60% of salary. Combine it with Social Security and savings to reach 70–80%.
Does the pension keep up with inflation?
Only if your plan has a cost-of-living adjustment (COLA). Many private pensions don’t, so the real value erodes over time.
Should I take a lump sum or monthly pension payments?
It depends on the return you can realistically earn on the lump sum versus the pension’s COLA and your payout horizon. Use the lump-sum-vs-monthly comparison below to see which is worth more at your assumed investment return over your expected timeframe.
What is a joint-and-survivor pension option?
It pays a reduced monthly amount while both spouses are alive, then continues a percentage of that amount (commonly 50–100%) to the surviving spouse after your death. Single-life pays more now but nothing to a survivor.
Does working longer always increase lifetime pension income?
Not always — it depends on how much higher the later monthly benefit is and how many fewer years you’ll collect it. The work-longer comparison multiplies each option’s monthly benefit by the months you’d collect it to your life expectancy.