Pension Calculator
Pension Benefit
Results
| Annual Pension Benefit | — |
|---|---|
| Monthly Pension Benefit | — |
| Benefit as % of Salary | — |
| After 1 Year COLA | — |
How to Use This Pension Calculator
Defined-benefit pensions feel like a foreign language compared to 401(k) balances—"2% times 25 years times final average salary" is the whole story for many teachers and firefighters. Plug in your plan's multiplier and service years to translate that into monthly income.
- Enter years of service. Total credited years toward pension eligibility.
- Enter final average salary. Use your plan's high-year average, not necessarily today's paycheck.
- Enter pension multiplier. Percent per year of service (commonly 1.5%–2.5%).
- Enter COLA rate (optional). Expected annual cost-of-living adjustment on the benefit.
- Press Calculate. Review annual and monthly benefit, benefit as % of salary, and COLA-adjusted amount after one year.
Fold pension income into the Retirement Calculator as other income, or compare fixed payouts with the Annuity Payout Calculator.
Pension Formulas and Practical Applications
Most public DB plans multiply service years by a fixed percentage of salary—a predictable income stream unlike a volatile account balance. COLA riders inflate that stream over retirement.
Core benefit formula
Annual Pension = Years × Multiplier × Final Average Salary / 100
25 years × 2% × $80,000 = $40,000/year (50% of salary), or about $3,333/month before COLA.
COLA adjustment
Year-2 Benefit = Year-1 Benefit × (1 + COLA)
At 2% COLA, that $40,000 benefit rises to $40,800 after the first adjustment year—modest alone, meaningful over a 25-year retirement.
Frequently Asked Questions
How is pension benefit calculated?
Annual benefit equals years of service times pension multiplier (percent per year) times final average salary, divided by 100.
What is a typical pension multiplier?
Public and union plans often use 1.5% to 2.5% per year of service. Enter your plan's exact multiplier from your benefits statement.
What does After 1 Year COLA show?
It projects the annual pension after one year of cost-of-living adjustment at the entered COLA rate.
Is final average salary my current pay?
Enter the final average salary your plan uses—often the average of your highest 3 or 5 earning years, which may exceed current pay.
Does this model survivor or lump-sum options?
No. Results reflect the standard single-life formula only. Joint-and-survivor or lump-sum buyout options reduce monthly payments.