How much will my pension be?
Type your final average salary, years of service and your plan’s multiplier. The pension calculator estimates your monthly and yearly pension, the share of salary it replaces, and the total paid over your retirement with any yearly raises.
- Monthly pension
- $1,562.50
Your pension would be $1,562.50 a month ($18,750.00 a year), 25% of your salary.
- Yearly pension
- $18,750.00
- Share of salary replaced
- 25%
- Pension in the last year
- $18,750.00
- Total over retirement
- $468,750.00
- Years
- 25
Monthly pension: $1,562.50. Your pension would be $1,562.50 a month ($18,750.00 a year), 25% of your salary.
How much pension each year?
What is paid each year?
The results are estimates for information only. They are not financial, tax, or legal advice. Check the numbers with your lender or a qualified professional before you decide. Terms of use
How to calculate
Estimates a defined benefit pension from final average salary, years of service and the plan’s multiplier, with yearly cost-of-living raises and the total paid over retirement.
Example with the default inputs (Final average salary $75,000.00, Years of service 25, Multiplier 1%, Yearly raise (COLA) 0%, Years in retirement 25): Your pension would be $1,562.50 a month ($18,750.00 a year), 25% of your salary.
Method: Yearly pension = multiplier ÷ 100 × years of service × final average salary; monthly = yearly ÷ 12; each later year = the year before × (1 + COLA ÷ 100); total = the sum over the years in retirement.
- The plan pays a single-life pension from the first year, with no early-retirement reduction, cap or survivor option. Your plan’s own rules decide these.
- The COLA is a fixed percent each year after the first, read to 10 decimal places; set it to 0 for a pension with no raises.
- Amounts are before tax and in the dollars of each year, not adjusted for inflation.
Worked examples
Each example is checked against the calculator on every build.
- Final average salary $60,000.00, Years of service 30, Multiplier 1%, Yearly raise (COLA) 0%, Years in retirement 20 gives Yearly pension $18,000.00, Monthly pension $1,500.00, Share of salary replaced 30%, Pension in the last year $18,000.00, Total over retirement $360,000.00.Source: U.S. Department of Labor, Types of Retirement Plans (defined benefit example: 1 percent of average salary for the last 5 years of employment for every year of service), https://www.dol.gov/general/topic/retirement/typesofplans
- Final average salary $75,000.00, Years of service 25, Multiplier 2%, Yearly raise (COLA) 2%, Years in retirement 3 gives Yearly pension $37,500.00, Monthly pension $3,125.00, Share of salary replaced 50%, Pension in the last year $39,015.00, Total over retirement $114,765.00.Source: U.S. Department of Labor, Types of Retirement Plans (defined benefit example: 1 percent of average salary for the last 5 years of employment for every year of service), https://www.dol.gov/general/topic/retirement/typesofplans
- Final average salary $82,345.67, Years of service 22.5, Multiplier 1.75%, Yearly raise (COLA) 0%, Years in retirement 1 gives Yearly pension $32,423.61, Monthly pension $2,701.97, Share of salary replaced 39.375%, Total over retirement $32,423.61.Source: U.S. Department of Labor, Types of Retirement Plans (defined benefit example: 1 percent of average salary for the last 5 years of employment for every year of service), https://www.dol.gov/general/topic/retirement/typesofplans
How it works
- Yearly pension = multiplier ÷ 100 × years of service × final average salary.
- Monthly pension = yearly pension ÷ 12.
- Share of salary replaced = multiplier × years of service, as a percent.
- Each later year = the year before × (1 + COLA ÷ 100). Year 1 has no raise.
- Total over retirement = the yearly pensions added up over the years in retirement.
- Pension in the last year = the yearly pension in the last year of the schedule.
Every amount is an exact fraction of the numbers you typed; the COLA percent is read to 10 decimal places (rounded half up), so 60 years of raises stay exact. Values are rounded only for display.
Assumptions
- A single-life pension paid from the first year of retirement, with no early-retirement reduction, cap, survivor option or offset.
- Amounts are before tax and in the dollars of each year (not adjusted for inflation).
Rules
- Final average salary more than $0 and at most $10,000,000. Years of service more than 0 and at most 60 (part years allowed). Multiplier more than 0% and at most 10%. COLA from 0% to 10%. Years in retirement a whole number from 1 to 60.
Output format. Money in dollars and cents, rounded half up from the exact value; the share of salary with up to 2 decimals.
Worked examples by hand
The Department of Labor example. 1% × 30 years × $60,000 = $18,000 a year, $1,500 a month, 30% of salary. Over 20 years with no raise: 20 × $18,000 = $360,000.
2% a year of service, 25 years, $75,000, 2% COLA, 3 years. Year 1: 0.02 × 25 × 75,000 = $37,500 ($3,125 a month, 50% of salary). Year 2: × 1.02 = $38,250. Year 3: × 1.02 = $39,015. Total $114,765.
1.75%, 22.5 years, $82,345.67. 0.0175 × 22.5 × 82,345.67 = 32,423.6075625, shown as $32,423.61 a year and 2,701.967… = $2,701.97 a month; share 1.75 × 22.5 = 39.38% (39.375).
Other questions people ask
How is a defined benefit pension calculated?
Most plans multiply three numbers: a percent (the multiplier), your years of service, and your final average salary. The U.S. Department of Labor’s example is 1% of your average salary over your last 5 years, for every year of service.
What will a 30-year pension pay at 1%?
With a $60,000 final average salary: 1% × 30 × $60,000 = $18,000 a year, or $1,500 a month. That replaces 30% of the salary.
What is a pension multiplier?
The percent of salary your plan pays for each year of service. It is set by your plan; public plans often use 1.5% to 2.5%. Check your plan’s summary plan description.
What is a COLA?
A cost-of-living adjustment: a yearly raise in the pension. With 2% a year, a $37,500 pension becomes $38,250 in year 2 and $39,015 in year 3.
What does the page leave out?
Early-retirement reductions, caps on the benefit, survivor options, Social Security offsets and taxes. Your plan’s rules decide these, so treat the result as an estimate.
What is final average salary?
The average of your pay over the years your plan counts, such as your highest or last 3 or 5 years. Type the average your plan would use.