Pension Calculator

How it is calculated

The tool applies the usual defined-benefit formula: annual pension = years_service × final_salary × multiplier_pct ÷ 100. Years of service is the length of your pensionable service, final salary is the yearly salary your plan uses (in dollars), and the multiplier is the accrual rate per year of service as a percentage (1.5 means 1.5% per year). It then shows monthly pension = annual ÷ 12 and the replacement rate, annual pension ÷ final salary × 100, which is simply years × multiplier. Years and multiplier may be zero, but the final salary must be above zero. Inputs that cannot describe a real plan show no result: years above 70, a multiplier above 100, or a combination that would pay more than 100% of the final salary (for example 21 years at 5%). The tool applies your numbers only: no early-retirement reduction, cost-of-living increases, tax or survivor benefit.

Common mistakes

• Typing the multiplier as a decimal. Enter 1.5 for 1.5% a year; 0.015 is read as 0.015% and the pension comes out about 100 times too small.
• Using the highest salary instead of the plan's definition. Many plans use an average of the final years, not the very last salary.
• Entering years of employment when the plan counts only pensionable service, which can exclude part-time periods or breaks.
• Expecting early-retirement penalties, inflation indexing or tax to be applied. The result is a flat formula and none of these is included.
• Entering a multiplier and years that would pay more than the final salary, such as 5% for 21 years. The tool shows no result because a replacement rate above 100% is not a real plan; recheck the multiplier, which is usually a percent or two.