Pension Benefit Calculator
Estimate your defined-benefit pension payment based on years of service, final average salary, and benefit multiplier.
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How It Works
Defined-benefit pensions provide a guaranteed monthly income in retirement based on a formula using your salary and years of service. They are most common in government, military, and union jobs.
The Formula
Annual Pension = Final Average Salary × Multiplier % × Years of Service
Lifetime Total = Σ (Annual × (1 + COLA)^year)
Lifetime Total = Σ (Annual × (1 + COLA)^year)
Variables
- FAS — Final Average Salary — typically the average of your highest 3 or 5 years
- Multiplier — Benefit accrual rate per year of service (typically 1-2.5%)
- COLA — Cost-of-Living Adjustment — annual increase to keep pace with inflation
Example
$65,000 salary × 1.5% × 25 years = $24,375/year ($2,031/month). That is a 37.5% replacement rate. With 2% COLA over 20 years: $582,636 lifetime total.
Tips
- Your replacement rate (pension as % of salary) should ideally be 70-80% when combined with Social Security.
- Some pensions offer a lump-sum option — compare it to the annuity value using a present-value calculation.
- Joint-and-survivor options reduce your monthly amount but protect your spouse after your death.
- Federal FERS pension uses a 1% multiplier (1.1% if retiring at 62+ with 20+ years).
- Check whether your pension has a COLA — without one, inflation erodes purchasing power over 20+ years.