Pension vs. Lump Sum | Life Calculators

Monthly Pension ?The guaranteed monthly amount your employer will pay for life if you choose the pension option.

Lump Sum Offered ?The one-time cash payout your employer offers instead of the monthly pension. You would invest this yourself.

Your Age Now ?When the pension/lump sum decision takes effect.

Life Expectancy ?How long you expect to live. Longer life favors the pension; shorter life favors the lump sum.

Investment Return ?If you take the lump sum, what annual return do you expect to earn investing it yourself? Be realistic — 5-7% for a balanced portfolio.

Better Option

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Important notes about this calculator

This is an irreversible election. Real-world considerations not modeled: PBGC insurance limits, your employer's pension funded ratio, COLA on the pension (or absence thereof), survivor benefit elections, your discipline to actually invest the lump sum, and your tax bracket if rolled to an IRA. If your pension's implied return exceeds 6%, the pension is hard to beat with a balanced portfolio.