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CalculatorBuddy

Pension Calculator

Compare a pension lump sum with lifetime income, single-life with survivor benefits, or retiring later for a larger pension.

Maintained by CalculatorBuddy TeamEditorial methodology

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Lump Sum or Monthly Pension

ExampleSample values — edit any field to see your result.

$
% / year
$ / month
% / year

Results update as you type.

Break-even life age

81

Estimated result

Comparison
If you live to age 81 or older, the monthly pension is worth at least as much as the lump sum; before that age, the lump sum is worth more.

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Compare scenarios

Keep a baseline, then change an assumption to see its effect side by side.

Value comparison by age

Life ageLump sumMonthly pension
66$800,000.00$58,559.77
67$800,000.00$116,282.98
68$800,000.00$173,181.56
69$800,000.00$229,267.31
70$800,000.00$284,551.84
71$800,000.00$339,046.58
72$800,000.00$392,762.83
73$800,000.00$445,711.71
74$800,000.00$497,904.17
75$800,000.00$549,351.02
76$800,000.00$600,062.92
77$800,000.00$650,050.37
78$800,000.00$699,323.71
79$800,000.00$747,893.14
80$800,000.00$795,768.72
81$800,000.00$842,960.37
82$800,000.00$889,477.85
83$800,000.00$935,330.80
84$800,000.00$980,528.70
85$800,000.00$1,025,080.92
86$800,000.00$1,068,996.68
87$800,000.00$1,112,285.07
88$800,000.00$1,154,955.06
89$800,000.00$1,197,015.47
90$800,000.00$1,238,475.02
91$800,000.00$1,279,342.29
92$800,000.00$1,319,625.75
93$800,000.00$1,359,333.72
94$800,000.00$1,398,474.44
95$800,000.00$1,437,056.01
96$800,000.00$1,475,086.41
97$800,000.00$1,512,573.52
98$800,000.00$1,549,525.09
99$800,000.00$1,585,948.79
100$800,000.00$1,621,852.15
101$800,000.00$1,657,242.61
102$800,000.00$1,692,127.49
103$800,000.00$1,726,514.01
104$800,000.00$1,760,409.30
105$800,000.00$1,793,820.36
106$800,000.00$1,826,754.13
107$800,000.00$1,859,217.41
108$800,000.00$1,891,216.94
109$800,000.00$1,922,759.32
110$800,000.00$1,953,851.11
111$800,000.00$1,984,498.72
112$800,000.00$2,014,708.51
113$800,000.00$2,044,486.73
114$800,000.00$2,073,839.55
115$800,000.00$2,102,773.04
116$800,000.00$2,131,293.20
117$800,000.00$2,159,405.93
118$800,000.00$2,187,117.04
119$800,000.00$2,214,432.29
120$800,000.00$2,241,357.31
121$800,000.00$2,267,897.69
Break-even life age81

Explore three common defined-benefit pension decisions: take a lump sum or monthly income, elect single-life or joint-and-survivor payments, and retire now or work longer for a larger benefit.

Examples

Lump sum versus income

At age 65, an $800,000 lump sum is overtaken around age 81 by a $5,000 monthly pension with 3.5% COLA when the comparison return is 5%.

Work five years longer

$2,500 monthly at age 60 versus $3,800 at age 65 reaches the reference break-even around age 86 under the same return and COLA assumptions.

Formula

Each monthly payment is discounted using the equivalent monthly rate i = (1 + annual return)^(1/12) − 1. Payments receive the entered COLA after each completed year. Adding those discounted payments gives the pension's equivalent value at the comparison date.

A present-value winner is not automatically the right choice. Guaranteed lifetime income, access to cash, survivor needs, health, and inheritance goals can matter more than the mathematical crossover.

How to use the comparison

Use benefit amounts and survivor percentages from the plan's formal election package. The present-value result depends heavily on lifespan, COLA, and the comparison return, and it does not model taxes, investment fees, plan-specific guarantees, or the value of insurance against living longer than expected. Review the plan's options and the PBGC explanation of pension benefit choices before making an irrevocable election.

Frequently asked questions

How does the calculator compare a lump sum and monthly pension?
It discounts the growing monthly pension payments to retirement age and finds the life age at which that present value reaches the lump sum.
What does COLA mean?
A cost-of-living adjustment raises the pension payment each year. Enter zero if the pension has no COLA.
What is a joint-and-survivor pension?
It pays a usually smaller benefit while the retiree is alive and continues the elected survivor benefit while the covered spouse remains alive.
Does the calculator include taxes or pension-plan solvency?
No. Compare consistently after tax and consider plan guarantees, survivor elections, health, inflation protection, and rollover restrictions separately.

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