Annual pension benefit
$42,500/yr2.0% × 25 years × $85,000Pension Calculator
Estimate defined-benefit pension payments, pension versus lump-sum value, replacement rate, lifetime pension income, survivor benefit impact, and…
Pension planning
Pension Calculator
Estimate defined-benefit pension payments, compare pension versus lump-sum offers, and model early-retirement reductions.
Defined benefit estimateUse the classic formula: final average salary × years of service × benefit factor, then layer in COLA and other income sources.
Defined-benefit assessmentModerate pension estimate: this replaces about 50.0% of final salary, so supplemental savings may still matter.
Monthly pension payment
$3,542/mo23 modeled retirement yearsYears to retirement20
Replacement rate50.0%
Lifetime no COLA$977,500
Lifetime with COLA$1.23M
Employee contributions$127,500
Break-even ageAge 68
Survivor benefit$38,250/yr
Total income year 1$60,500/yr
Annual retirement income sources
Pension benefit$42,500/yr
Social Security / state pension$18,000/yr
Other income$0/yr
Total year-one retirement income$60,500/yr
What-if scenarios
If you work 5 more years$51,000/yr pension
COLA at 3% lifetime benefit$1.38M
Inflation-adjusted annual value after 20 years$23,531/yr
Without COLA, real value after 20 years$23,531/yr
Joint survivor monthly benefit$3,188/mo
Year-by-year pension schedule
| Age | Base pension | With COLA | Other income | Total income | Cumulative |
|---|---|---|---|---|---|
| 65 | $42,500 | $42,500 | $18,000 | $60,500 | $60,500 |
| 66 | $42,500 | $43,350 | $18,000 | $61,350 | $121,850 |
| 67 | $42,500 | $44,217 | $18,000 | $62,217 | $184,067 |
| 68 | $42,500 | $45,101 | $18,000 | $63,101 | $247,168 |
| 69 | $42,500 | $46,003 | $18,000 | $64,003 | $311,172 |
| 70 | $42,500 | $46,923 | $18,000 | $64,923 | $376,095 |
| 71 | $42,500 | $47,862 | $18,000 | $65,862 | $441,957 |
| 72 | $42,500 | $48,819 | $18,000 | $66,819 | $508,776 |
| 73 | $42,500 | $49,796 | $18,000 | $67,796 | $576,572 |
| 74 | $42,500 | $50,791 | $18,000 | $68,791 | $645,363 |
| 75 | $42,500 | $51,807 | $18,000 | $69,807 | $715,170 |
| 76 | $42,500 | $52,843 | $18,000 | $70,843 | $786,014 |
| 77 | $42,500 | $53,900 | $18,000 | $71,900 | $857,914 |
| 78 | $42,500 | $54,978 | $18,000 | $72,978 | $930,892 |
| 79 | $42,500 | $56,078 | $18,000 | $74,078 | $1.00M |
| 80 | $42,500 | $57,199 | $18,000 | $75,199 | $1.08M |
| 81 | $42,500 | $58,343 | $18,000 | $76,343 | $1.16M |
| 82 | $42,500 | $59,510 | $18,000 | $77,510 | $1.23M |
| 83 | $42,500 | $60,700 | $18,000 | $78,700 | $1.31M |
| 84 | $42,500 | $61,914 | $18,000 | $79,914 | $1.39M |
| 85 | $42,500 | $63,153 | $18,000 | $81,153 | $1.47M |
| 86 | $42,500 | $64,416 | $18,000 | $82,416 | $1.56M |
| 87 | $42,500 | $65,704 | $18,000 | $83,704 | $1.64M |
| 88 | $42,500 | $67,018 | $18,000 | $85,018 | $1.72M |
Formula
How defined-benefit pension payments are estimated
The calculator estimates an annual pension from your final average salary, years of service, and benefit factor, then compares that income with other retirement sources and lifetime assumptions.
Annual pension = final average salary × years of service × benefit factor
Replacement rate = annual pension ÷ final average salary
Comparison
How pension versus lump sum is modeled
The pension-vs-lump-sum tab compares lifetime pension payments with a lump sum invested at your return assumption and withdrawn over retirement.
Pension lifetime value = after-tax pension payments + projected COLA increases
Lump sum value = withdrawals taken + remaining balance at life expectancy
Use cases
When to use this Pension Calculator
Use it to estimate pension income, compare a monthly pension with a lump-sum offer, and understand early-retirement reductions before discussing options with your plan administrator.
Estimate annual and monthly defined-benefit pension payments
Use the result as a planning estimate only, then confirm plan rules, tax impact, survivor benefits, COLA terms, and payout elections with qualified professionals.
Calculate pension replacement rate from final average salary
Use the result as a planning estimate only, then confirm plan rules, tax impact, survivor benefits, COLA terms, and payout elections with qualified professionals.
Compare lifetime pension value with a lump-sum offer
Use the result as a planning estimate only, then confirm plan rules, tax impact, survivor benefits, COLA terms, and payout elections with qualified professionals.
Model COLA assumptions, survivor benefits, and other retirement income
Use the result as a planning estimate only, then confirm plan rules, tax impact, survivor benefits, COLA terms, and payout elections with qualified professionals.
Estimate the break-even age for pension versus lump sum decisions
Use the result as a planning estimate only, then confirm plan rules, tax impact, survivor benefits, COLA terms, and payout elections with qualified professionals.
Analyze how early retirement reductions affect lifetime pension income
Use the result as a planning estimate only, then confirm plan rules, tax impact, survivor benefits, COLA terms, and payout elections with qualified professionals.
Calculator details
Pension Calculator formula, assumptions, and examples
Last updated: July 2026
Formula used
Formula used
Pension estimate = benefit formula inputs such as final salary, service years, and plan multiplier when applicable.
Assumptions
Assumptions
- Actual pension rules vary by plan.
- Cost-of-living adjustments, survivor options, and early retirement reductions may differ.
- Inputs are estimates.
Example calculation
Example calculation
A plan using 1.5% × 30 service years × $60,000 final salary estimates $27,000 per year before adjustments.
When to use this calculator
When to use this calculator
Use it to compare pension scenarios before reviewing official plan documents.
Disclaimer
Disclaimer
Pension estimates depend on plan rules. Confirm with your pension administrator or a qualified advisor.
Questions
Frequently Asked Questions
What does this pension calculator estimate?
It estimates defined-benefit pension income, replacement rate, lifetime pension value, survivor benefit impact, pension versus lump-sum tradeoffs, and early-retirement reductions based on the assumptions you enter.
How is a defined-benefit pension calculated?
A common simplified formula is final average salary multiplied by years of service multiplied by a benefit factor. Actual pension formulas can vary by plan document.
How does the pension versus lump sum comparison work?
The calculator compares lifetime after-tax pension payments with a lump sum invested at your return assumption and withdrawn over the retirement period you select.
Can this replace pension, tax, or financial advice?
No. It is for educational planning only. Pension decisions can depend on plan rules, survivor elections, COLA terms, taxes, health, longevity, investment risk, and personal circumstances. Review decisions with your plan administrator and a qualified advisor.
