How to use the Pension Calculator
Estimate pension income value advantage from your retirement age, lump sum payment amount, your investment return with the Pension Calculator. It includes Lump sum payout or monthly pension income?, Single-life or joint-and-survivor pension payout?, Should you work longer for a better pension? workflows, so choose the one that matches the values you actually know. Use it as a planning baseline, then compare the estimate with current rates, fees, taxes, and provider terms.
Step by step
- For the Pension example, select Lump sum payout or monthly pension income? and enter your retirement age, lump sum payment amount, your investment return, monthly pension income, cost-of-living adjustment^1, and the remaining settings listed in the worked example. Keep each value in the unit displayed beside its field.
- Review the selected Pension workflow and inputs, then read pension income value advantage in the result panel.
- Change one Pension assumption at a time to compare scenarios. Use Reset to restore this tool's worked example values.
How the calculation works
Discounts pension income over life expectancy and compares lump-sum, survivor, and delayed-retirement alternatives.
Worked example
To reproduce the Pension worked example, reset the calculator. Select the Lump sum payout or monthly pension income? workflow. Use your retirement age 65 years; lump sum payment amount $500,000; your investment return 6 %; monthly pension income $3,500; cost-of-living adjustment^1 2 %; your life expectancy 90 years. The result is pension income value advantage of $161,600.66. Pension present value: $661,600.66. Review the displayed units before comparing the result.
Understanding the result
The Pension reports pension income value advantage. Use it as a planning baseline, then compare the estimate with current rates, fees, taxes, and provider terms. Planning estimate only. Rates, fees, taxes, eligibility rules, timing, and provider terms can change the result.
How to check the answer
Check the Pension result by entering the same your retirement age, lump sum payment amount, your investment return in an independent statement, lender, provider, or official tool. Change one input and confirm that pension income value advantage moves in the direction implied by Discounts pension income over life expectancy and compares lump-sum, survivor, and delayed-retirement alternatives.
Common questions
What does the Pension calculate?
Estimate pension income value advantage from your retirement age, lump sum payment amount, your investment return with the Pension Calculator.
Which inputs does the Pension example use?
The worked example uses your retirement age, lump sum payment amount, your investment return, monthly pension income, cost-of-living adjustment^1, and the remaining settings listed in the worked example in the Lump sum payout or monthly pension income? workflow. Other workflows can show different fields. Keep the chosen workflow and units with the result when comparing calculations.
Is the Pension result exact?
Planning estimate only. Rates, fees, taxes, eligibility rules, timing, and provider terms can change the result. Recheck your retirement age, lump sum payment amount, your investment return and use pension income value advantage only for a decision where that level of precision is appropriate.