Pension Income Estimate Calculator
Estimate the annual and monthly pension a defined-benefit plan will pay using your final salary, years of service and the plan’s accrual rate.
How it works
Annual pension = final average salary × years of service × accrual rate
A traditional defined-benefit pension pays a lifetime income set by a formula, not by an account balance. The formula multiplies your final average salary by your years of service and by the plan’s accrual (or “multiplier”) rate — a 1.5% multiplier over 30 years replaces 45% of salary. Because service and the multiplier compound directly, each extra year late in your career is often worth far more than an early one, since it is applied to a higher final salary.
Worked example
With an $80,000 final average salary, 30 years of service and a 1.5% accrual rate, the replacement is 30 × 1.5% = 45%. The pension is $80,000 × 45% = $36,000 a year, or $3,000 a month for life.
Frequently asked questions
What is an accrual rate?
It is the share of your salary the plan credits for each year you work — commonly 1% to 2%. Multiply it by your years of service to get the percentage of salary the pension will replace.
Does this include cost-of-living increases?
No. Some pensions add annual cost-of-living adjustments (COLAs) that raise the payment over time; this estimate shows the starting benefit before any COLA.
Is a pension taxable?
Most employer pension income is taxed as ordinary income when received. The exact treatment depends on whether contributions were made pre- or post-tax and on your local rules.
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Educational estimate, not financial advice.