Pension Calculator
Estimate your defined-benefit pension: enter years of service, final average salary, and your plan's multiplier to get your annual and monthly payout.
Most pensions pay years of service × final average salary × a benefit multiplier (often 1.5–2.5% per year). Enter your numbers to see your estimated annual and monthly pension plus your income replacement ratio — the share of your working salary the pension replaces.
Usually your highest 3–5 year average — check your plan
Often 1.5%–2.5%; check your plan documents
How to use this calculator
- Enter your total years of creditable service.
- Enter your final average salary (usually highest 3–5 year average).
- Enter your plan's benefit multiplier per year of service.
- Click Calculate to see your annual pension, monthly pension, and replacement ratio.
The formula
Annual pension = years of service × final average salary × multiplier
Worked example
Thirty years of service with a $90,000 final average salary and a 2% multiplier gives a $54,000 annual pension — $4,500 per month, replacing 60% of salary.
Frequently Asked Questions
What is final average salary?
Usually the average of your highest-earning 3 to 5 consecutive years — check your plan documents, because the definition varies. Some plans use your highest 3 years, others 5, and a few use career average. Using the wrong definition is the most common way people mis-estimate their pension.
What is a typical benefit multiplier?
Public-sector plans commonly use 1.5% to 2.5% per year of service, with 2% being the most typical. At 2% and 30 years, you replace 60% of your final average salary. Some plans tier the multiplier — for example, 1.5% for the first 20 years and 2% after — in which case run the calculator separately for each tier and add them.
Does this include cost-of-living adjustments?
No. Many pensions include full or partial COLAs and some include none — it varies enormously by plan. A pension without COLA loses about half its purchasing power in 25 years at 3% inflation. Check whether your plan adjusts for inflation before treating this number as lifetime income.
Should I take the lump sum or the monthly pension?
It depends on the lump-sum conversion rate, your health and longevity expectations, and whether you can invest the lump sum wisely. A common check: divide the lump sum offer by the annual pension — if the result is well above 20, the monthly payments are usually the better deal. This calculator gives you the monthly figure to compare against.
Are pensions guaranteed?
Private pensions are backstopped by the PBGC up to annual limits, and public pensions depend on the sponsoring government's funding. Underfunded plans can and do cut benefits. Know your plan's funded status — it's usually in the annual funding notice.