Skip to content
ToolQivo

Pension Calculator

Defined benefit income, and whether to take the lump sum.

Calculators Reviews Free · no sign-up

The lump sum alternative

—

Annual pension

—

—

Before reduction—
Early retirement cut—
As % of salary—
Survivor pension—

Pension against lump sum

Implied return needed—
Total pension paid—
Years to match lump sum—

Quick Tool Overview

The Pension Calculator works out the annual income a defined benefit scheme has earned you from service, salary and accrual rate, and then answers the harder question: the implied return you would need on the lump sum to reproduce that pension for life.

What it does
Calculates defined benefit pension income and lump sum value
You give it
Years of service, pensionable salary and the accrual rate
You get back
The annual pension, any early reduction, and the lump sum implied return
Best for
Deciding between a pension and a lump sum offer
Calculators Free, unlimited use No sign-up Runs in your browser

About the Pension Calculator

Enter your years of service, your final or average salary and your scheme accrual rate to calculate the annual pension you have earned, before and after any early retirement reduction. Survivor options and inflation indexing are handled as separate adjustments.

The harder question a pension poses is whether to take the income or the lump sum, and the calculator answers it by computing the implied return: the rate you would need to earn on the lump sum to reproduce the pension for life. If that rate is high, the pension is the better deal; if it is low, the lump sum probably is. Longevity, inflation protection and whether the scheme is well funded all belong in the decision, but the implied return is where it should start.

Key features of the Pension Calculator

Implied return calculated

The rate the lump sum must earn to match the pension for life — the right place for the decision to start.

Early retirement reduction

Retiring before scheme normal age cuts the pension, and by how much is applied rather than assumed.

Any accrual rate

Sixtieths, eightieths or a percentage, whichever way your scheme states it.

Inflation indexing

Full, capped or none — over a thirty-year retirement the difference between those is enormous.

Survivor benefit

Model the reduction for a spouse pension, which changes the comparison against a lump sum.

How to use the Pension Calculator

  1. 1

    Enter your service and salary

    Years of pensionable service and the final or career-average salary your scheme uses.

  2. 2

    Set the accrual rate

    Commonly one sixtieth or one eightieth per year, or a percentage if that is how your scheme states it.

  3. 3

    Adjust for retirement age

    Retiring before the scheme normal age applies a reduction; retiring later may increase the pension.

  4. 4

    Compare the lump sum

    Enter the offer and read the implied return needed to match the pension for life.

Frequently asked questions

Years of service multiplied by the accrual rate multiplied by your pensionable salary. A thirty-year career at one sixtieth accrual gives half of final salary as an annual pension for life.

Reviews of the Pension Calculator

What people who use the Pension Calculator think of it. Reviews come from visitors and are posted as written.

No ratings yet

Yours would be the first.

  • 5 0 reviews rated 5 stars
  • 4 0 reviews rated 4 stars
  • 3 0 reviews rated 3 stars
  • 2 0 reviews rated 2 stars
  • 1 0 reviews rated 1 star

Write a review

Used this tool? Your rating helps the next person decide.

Your rating

Plain text only — links, email addresses and HTML are not accepted. Your name and review are shown publicly; nothing else is collected. See the privacy policy.

0 reviews

Newest first

No reviews yet

Be the first to rate the Pension Calculator. It takes half a minute and no account.

Write the first review

More calculators