# How much will my pension be?

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.

- Page: https://www.acalculator.org/finance/pension-calculator
- JSON spec: https://www.acalculator.org/finance/pension-calculator.json
- Version: 1a794eabc29a

## Default answer

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.

## Inputs

| Key | Label | Description |
| --- | --- | --- |
| salary | Final average salary | Your average yearly pay over the years your plan counts, such as the last 3 or 5 years. |
| yos | Years of service | The years of service your plan credits, which may include part years. |
| mult | Multiplier | The percent of salary your plan pays for each year of service, from your plan documents. |
| cola | Yearly raise (COLA) | The cost-of-living raise your plan adds each year after the first, if any. |
| yrs | Years in retirement | How many years of payments to add up and chart. |

## Outputs

| Key | Label | Description |
| --- | --- | --- |
| monthly | Monthly pension | The first year’s pension ÷ 12. |
| annual | Yearly pension | Multiplier × years of service × final average salary. |
| replacement | Share of salary replaced | Multiplier × years of service: the yearly pension as a percent of the final average salary. |
| last | Pension in the last year | The yearly pension in the last year, after raises. |
| total | Total over retirement | All yearly pensions added up. |

## 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.

## Assumptions

- 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

1. salary = $60,000.00, yos = 30, mult = 1%, cola = 0%, yrs = 20 gives annual = $18,000.00, monthly = $1,500.00, replacement = 30%, last = $18,000.00, total = $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.
2. salary = $75,000.00, yos = 25, mult = 2%, cola = 2%, yrs = 3 gives annual = $37,500.00, monthly = $3,125.00, replacement = 50%, last = $39,015.00, total = $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.
3. salary = $82,345.67, yos = 22.5, mult = 1.75%, cola = 0%, yrs = 1 gives annual = $32,423.61, monthly = $2,701.97, replacement = 39.375%, total = $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.

## FAQ

### 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.

## Sources

- U.S. Department of Labor, Types of Retirement Plans (a defined benefit plan promises a specified monthly benefit at retirement; example formula: 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 (retrieved 2026-10-02)