Pension Type
Select your pension formula type
Service & Age
Years of service and age parameters
Survivor Benefit Option
Choose payout continuation for beneficiaries
Salary vs Pension Income
Compare your current salary to pension
Your pension replaces 60.0% of your final salary. Most financial advisors recommend 70-80% replacement rate for comfortable retirement.
How Your Pension is Calculated
Formula and calculation breakdown
Final Average Formula:
Annual Pension = Final Salary × Years × Multiplier
= $80,000 × 30 × 2% = $48,000/year
Survivor Options Comparison
Compare different payout options
| Option | Your Benefit | Survivor Gets |
|---|---|---|
| Single Life | $4,000/mo | None |
| Joint & 50% | $3,680/mo | $1,840/mo |
| Joint & 75% | $3,520/mo | $2,640/mo |
| Joint & 100% | $3,280/mo | $3,280/mo |
What if I worked longer?
See how additional years of service affect your pension
Personalized Insights
2 insights based on your inputs
Consider Survivor Benefits
Single-life pays the highest monthly benefit but stops at death. If you have a spouse, consider joint & survivor options for continued income protection.
Pension May Beat Lump Sum
Your monthly pension ($4,000) likely exceeds what you'd safely withdraw from the lump sum equivalent ($2,174/mo at 4% rule).
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Pension Benefits
Monthly Benefit
$4,000
Annual Benefit
$48,000
60.0% replacement rate
Lump Sum vs Monthly Pension
Which wins, and when
From your plan's election paperwork
What the lump sum earns if you invest it
| Year | Annuity has paid | Lump-sum balance |
|---|---|---|
| 5 | $240,000 | $600,823 |
| 10 | $480,000 | $531,341 |
| 15 | $720,000 | $437,619 |
| 20 | $960,000 | $311,202 |
The annuity's guarantee has real value the table can't show: it cannot be outlived and often carries survivor options or COLAs. The lump sum wins on flexibility, inheritance, and control — and if the numbers above show it lasting well past life expectancy at a conservative return, that's your signal it may be underpriced. This is a comparison tool, not annuity pricing advice.
Frequently Asked Questions
What is a pension?
A pension is a retirement plan where an employer promises to pay you a set monthly benefit for life after retirement. The benefit is typically based on your salary and years of service. Unlike 401(k)s, the employer bears the investment risk.
How is pension calculated?
Most pensions use this formula: Final Average Salary × Years of Service × Benefit Multiplier. For example, with a 2% multiplier and 30 years of service, you'd receive 60% (2% × 30) of your final average salary annually.
What is a pension benefit multiplier?
The benefit multiplier (or accrual rate) is the percentage of salary you earn for each year of service. Common multipliers range from 1.5% to 2.5%. A 2% multiplier means each year of service earns 2% of your final salary as annual pension.
What are survivor benefits?
Survivor benefits allow your pension to continue paying to a spouse after your death. Options typically include single life (highest payment, no survivor benefit), or joint-and-survivor at 50%, 75%, or 100% continuation, with corresponding reductions to your benefit.
Should I take a lump sum or monthly pension?
Monthly pension provides guaranteed lifetime income and may include survivor benefits and cost-of-living adjustments. Lump sum offers flexibility, inheritance potential, and control over investments, but you bear longevity and investment risk.
How this works
Calculations are run entirely in your browser. No inputs are sent to our servers and no account is required. Formulas follow standard US definitions from the IRS and the CFPB where applicable; international users should confirm local tax and regulatory rules apply.
What this tool can’t do
When to consult a professional
This is a software engineering tool, not financial advice. Run the math here, then take the result to a certified financial planner, CPA, or your bank before making a decision that materially affects your money.
Sources
- [1]Consumer Financial Protection Bureau (CFPB)Official sourceconsumerfinance.govAccessed Apr 21, 2026
US consumer finance regulator; authoritative on mortgage disclosures, APR rules, credit cards.
Full-stack software engineer specializing in embedded systems, web architecture, and AI/ML. Founder of Practical Web Tools. Built the gesture-controlled drone IP acquired by KD Interactive (Aura Drone, sold on Amazon).