Pension Calculator

Estimate pension income from salary, years of service, accrual rate, retirement age, COLA, and optional retirement reductions.

How to Use

  1. Enter age, retirement age, final average salary, years of service, and accrual rate.
  2. Add optional settings like employee contributions, COLA, early retirement reduction, and survivor reduction.
  3. Choose your payout frequency and result view.
  4. Review annual pension, monthly pension, replacement ratio, and Show Work details.
Retirement Income View
Live pension projection based on your current plan assumptions.
Annual
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Monthly
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Replacement
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Lump Sum
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Status: Waiting for inputs
Retirement Age
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Service Years
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Final Avg Salary
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Accrual Rate
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Income Replacement —
Inputs & Settings
Use plan values from your pension summary or estimate with standard assumptions.
Your current age in years.
Age when pension payments begin.
Used for payout horizon and lump-sum estimates.
Usually highest average salary used by the plan formula.
Credited years under the pension plan.
Example: 1.8% × salary × service years.
Optional for contribution totals and summary details.
Annual cost-of-living adjustment after retirement.
Used when retiring before full retirement age.
Optional reduction to support survivor benefits.
Reference age for early retirement adjustments.
Optional for present value or lump-sum estimate.
Changes result display formatting.
Choose which result to emphasize.

Pension Breakdown

Base Formula Result
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Early Retirement Adjustment
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Survivor Adjustment
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COLA-Adjusted Year 1
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Estimated Contributions
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Years in Retirement
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Show Work (step-by-step)
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Work should show formula steps, age/service adjustments, and payout conversions in a consistent order.

Pension Formulas

Quick answer: Many defined benefit pensions use a formula similar to Benefit = Final Average Salary × Accrual Rate × Years of Service.

Plans vary, so actual employer formulas may include caps, early retirement factors, survivor options, and COLA rules.

  • Base Annual Pension: Final Average Salary × Accrual Rate × Service Years
  • Monthly Pension: Annual Pension ÷ 12
  • Replacement Ratio: Annual Pension ÷ Final Average Salary
  • Early Reduction: Base Benefit × Reduction Factor
  • COLA Projection: Payment × (1 + COLA)n
  • Lump Sum Estimate: Present value of projected payments using discount rate assumptions
This tool is an estimate helper and not a substitute for your official pension administrator statement.

FAQ

What is a pension accrual rate?

The accrual rate is the percentage of salary earned as future pension income for each year of service, such as 1.5% or 2.0% per year.

What is final average salary?

It is usually the average of your highest earning years, often the last 3 to 5 years depending on the plan.

Why does retiring early reduce the pension?

Many plans reduce benefits when payments begin before the plan’s full retirement age because benefits are expected to be paid for longer.

What does COLA do?

COLA increases pension payments over time to help offset inflation, if the plan includes that feature.

Is lump-sum value guaranteed?

No. Lump-sum estimates depend on plan rules, mortality assumptions, interest rates, and whether the plan actually offers a lump-sum option.

Tool Info

Last updated:

Updates may include improved retirement assumptions, payout display options, and edge-case handling for reductions and COLA.