Pension Calculator
Pension decisions made before retirement cannot be reversed. Use our pension calculator to evaluate options and make informed choices for your retirement income.
Option 1: lump sum payment
Option 2: monthly pension payment
Results
What is a Pension Calculator?
A pension calculator is a tool that helps you evaluate different pension payment options and make informed decisions about your retirement income. It compares scenarios such as taking a lump sum payment versus receiving monthly income, choosing single-life versus joint-and-survivor benefits, or retiring earlier versus working longer.
Making the right pension decisions is crucial since these choices often cannot be changed after retirement. Our calculator helps you understand the financial implications of each option based on factors like life expectancy, investment return, and inflation.
How to Use This Calculator
Our pension calculator offers three key comparisons to help you make informed retirement decisions:
Lump Sum vs. Monthly Pension Income
Compare receiving a one-time lump sum payment versus regular monthly pension payments. This analysis helps determine which option might provide better long-term value.
- Enter your retirement age
- Input your lump sum payment amount
- Input your expected investment return rate
- Enter your expected monthly pension income
- Input the cost-of-living adjustment (if applicable)
Single-Life vs. Joint-and-Survivor Pension
Compare a higher single-life pension that ends at your death versus a lower joint pension that continues paying your spouse after you pass away.
- Enter your retirement age and life expectancy
- Enter your spouse's age and life expectancy
- Input both the single-life and joint-survivor pension amounts
- Enter your expected investment return and inflation rate
Working Longer for a Better Pension
Evaluate whether postponing retirement for a few years to secure a higher monthly pension income is financially advantageous.
- Enter details for early retirement option (age and monthly income)
- Enter details for delayed retirement option (age and monthly income)
- Input your expected investment return and inflation rate
Important Considerations
Health Status
Your current health and family history can significantly impact which pension option is best for you. If you expect a shorter-than-average lifespan, a lump sum or single-life option might be more beneficial.
Inflation Protection
Consider whether your pension includes cost-of-living adjustments. Without inflation protection, your pension's purchasing power will decrease over time.
Investment Expertise
If you choose a lump sum, consider your investment knowledge and comfort with managing a large sum. Poor investment decisions could diminish the value compared to a guaranteed monthly payment.
Spouse Protection
If you have a spouse who depends on your income, a joint-and-survivor option provides security, albeit at a reduced monthly payment during your lifetime.