Pension Calculator
Estimate defined-benefit pension income from salary, service years, and multiplier.
Annual Pension
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Monthly Pension
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Pension at 75
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Pension at 80
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Pension at 85
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Lifetime to 85
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Guide
How it works
Use this calculator to estimate defined-benefit pension income at retirement.
What this calculator does
The pension calculator estimates annual and monthly pension income from years of service, final average salary, and pension multiplier. It can also project COLA-adjusted values at later ages.
It uses:
- years of service
- final average salary
- pension multiplier
- retirement age and COLA
Pension Formula
Annual Pension = Years of Service × Multiplier × Final Average Salary
Where:
- Years of Service = credited work years
- Multiplier = pension percentage per year
- Final Average Salary = salary basis used by plan
- COLA = annual cost-of-living adjustment
Example calculation
If:
- Years of service = 30
- Final average salary = 80,000
- Multiplier = 1.5%
- Annual pension = 30 × 1.5% × 80,000
Then:
- Annual pension = 36,000
- Monthly pension = 3,000
- COLA can increase future payments
- Lifetime value depends on longevity
The estimated pension is 36,000 per year.
What is pension income?
Pension income is retirement income from a defined-benefit plan. It is usually based on salary, service years, and a plan formula.
Why pension income matters
- provides predictable retirement income
- reduces portfolio withdrawal pressure
- supports retirement budgeting
- affects lump sum decisions
When to use this calculator
- estimating pension income
- reviewing retirement timing
- comparing service years
- checking COLA impact
Common mistakes
- using the wrong salary average
- ignoring plan-specific rules
- forgetting survivor options
- treating gross pension as after-tax income
Pension income vs annuity income
Pension income comes from an employer plan formula. Annuity income comes from an insurance contract or purchased income stream.
Both can provide regular retirement payments.
FAQs
What is pension income?
Pension income is retirement income from a defined-benefit employer plan.
How do you calculate pension income?
Multiply years of service by the pension multiplier and final average salary.
What is a good pension income?
A good pension covers essential expenses or meaningfully reduces portfolio withdrawals.
What is the difference between pension and annuity income?
Pension is employer-plan income. Annuity income comes from an annuity contract.
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