Estimate pension, lump sum, taxes, and inflation. View present value, break-even age, withdrawals, and balances. Make smarter retirement choices with clearer numbers and confidence.
Use the fields below to test taxes, returns, inflation, pension growth, and longevity assumptions.
These sample entries show how different assumptions can change the decision.
| Scenario | Current Age | Retirement Age | Monthly Pension | Lump Sum Offer | COLA | Tax Mix |
|---|---|---|---|---|---|---|
| Conservative retiree | 58 | 65 | $2,400 | $395,000 | 2.0% | 15% pension / 12% lump |
| Higher pension path | 52 | 62 | $3,600 | $510,000 | 2.5% | 18% pension / 10% lump |
| Higher lump sum path | 60 | 65 | $2,100 | $620,000 | 1.5% | 14% pension / 8% lump |
Net Lump Sum = Lump Sum Offer × (1 − Lump Sum Tax Rate)
Year 1 Net Pension = Monthly Pension × 12 × (1 − Pension Tax Rate)
Pension in Year n = Year 1 Net Pension × (1 + COLA Rate)^(n − 1)
Ending Balance = (Beginning Balance × (1 + Return Rate)) − Withdrawal
Present Value Today = Σ [Future Pension Payment / (1 + Discount Rate)^n]
Real Return ≈ ((1 + Nominal Return) ÷ (1 + Inflation Rate)) − 1
It compares the after-tax value of a lump sum against the modeled present value and lifetime income stream of a pension. It also simulates whether the lump-sum portfolio can keep up with pension-like withdrawals over time.
The discount rate converts future pension payments into today’s value. A higher discount rate reduces the present value of the pension, while a lower discount rate makes long-term future payments look more valuable.
COLA means cost-of-living adjustment. It increases the pension payment each year by the entered rate. A higher COLA usually improves the pension path because later payments grow instead of staying flat.
Pension income and lump sums can be taxed differently. Separating them makes the comparison more realistic. The model reduces each path by its own tax rate before showing income, present value, and balances.
It shows the age when the lump-sum portfolio can no longer fully match the targeted pension-like withdrawal. If it never appears, the model assumes the portfolio stayed funded through the chosen life expectancy.
Not always. Present value is a strong comparison tool, but guarantees, survivor benefits, health, spending needs, legacy goals, and investment comfort also matter. Use the result as analysis support, not as automatic advice.
Yes. The ending lump balance shows what might remain at life expectancy under your assumptions. That can help you compare guaranteed pension income against a lump sum that could leave money to heirs.
No. Good retirement analysis uses multiple scenarios. Try conservative, moderate, and optimistic return assumptions, and test different tax rates, inflation rates, and life expectancies before deciding between payout options.
This calculator is for educational planning and scenario testing. It does not replace personalized advice from a licensed financial planner, pension administrator, tax professional, or benefits specialist.
Important Note: All the Calculators listed in this site are for educational purpose only and we do not guarentee the accuracy of results. Please do consult with other sources as well.