Pension Calculator – Estimate Your Retirement Income
Estimate a defined-benefit pension from salary and years of service.
About the Pension Calculator
What is the Pension Calculator?
A pension calculator estimates a defined-benefit pension using the common "salary × years × accrual rate" formula.
Why use this calculator?
Defined-benefit plans pay a guaranteed benefit for life, but the formula varies by employer. Knowing your approximate pension helps you plan around Social Security and personal savings.
How to use it
- Enter your average salary (often the highest few years).
- Enter your years of service.
- Enter the accrual rate your plan uses.
- See the annual and monthly pension, and the lifetime total.
Formula
Annual pension = average salary × years of service × accrual rate.
Actual formulas vary: some use a career average, others use final pay, and most provide survivor and cost-of-living options. Check your plan document.
Frequently Asked Questions
What is a defined-benefit pension?
A retirement plan that pays a guaranteed monthly benefit calculated by a formula, funded and managed by the employer.
Can I take a lump sum instead of monthly payments?
Many plans allow a lump sum, but it trades a guaranteed lifetime income for a pot you must manage. Consider inflation and longevity carefully.
What is compound interest?
Compound interest is interest earned on both your original money and on previously earned interest. Over time it can make savings grow much faster than simple interest.
What is the difference between nominal and effective return?
The nominal return ignores compounding within the year, while the effective (annualised) return accounts for it. The effective figure is usually higher and better reflects real growth.
How does inflation affect my returns?
Inflation erodes purchasing power. The real return is the nominal return minus inflation, so an investment can grow in dollars yet still lose value in what it can buy.
What rate of return should I assume?
A common long-term assumption for a diversified stock portfolio is about 6% to 8% per year after inflation, but returns vary and are never guaranteed.
Does this account for taxes and fees?
Unless stated, the tool shows pre-tax, pre-fee growth. Subtract your fund expense ratio and expected tax rate to estimate what you keep.
Is this calculator free to use?
Yes. Every calculator on this site is completely free, with no hidden fees, no subscriptions and no limits on how many times you can use it.
How accurate are the results?
We use standard, widely accepted formulas and calculate in your browser using double-precision arithmetic. Results are rounded for readability, so treat them as reliable estimates rather than a guarantee. Real-world factors can vary the true figure.
Can I add this calculator to my own website?
Yes. Open this calculator page and use the "Add to your website" box in the sidebar to copy a ready-made iframe snippet, then paste it into any HTML page.