Pension Calculator

Why Pension Planning Matters

Retirement planning ensures financial independence in your later years. This calculator helps you estimate how much you’ll have saved by retirement, accounting for contributions, investment growth, and inflation.

How to Use This Calculator

• Current Age: Your present age
• Retirement Age: When you plan to stop working
• Current Savings: Amount already saved in retirement accounts
• Monthly Contribution: How much you save each month
• Annual Return: Expected average investment return
• Inflation Rate: Expected average inflation (default: 2.5%)
• Click "Calculate Pension" to see your projected retirement fund

Formula Used

Where:

• FV = Future Value of pension
• PV = Present value (current savings)
• PMT = Monthly contribution
• r = Monthly interest rate
• n = Number of months until retirement
• Inflation Adjustment: FV / (1 + inflation)^(years)

Example: Age 30, saving $1,000/month, $50K saved, 7% return, 2.5% inflation
→ Future Value: ~$1.8M → Inflation-Adjusted: ~$860K (in today’s dollars)

Interpreting Your Results

Retirement Income Rule of Thumb

The 4% Rule suggests you can safely withdraw 4% of your retirement fund annually without running out.

• If you have $1,000,000, you can withdraw $40,000/year
• If you need $60,000/year, aim for a fund of $1.5 million

Tips to Boost Your Pension

• ✅ Start early — compound interest works best over time
• ✅ Increase contributions annually — even 1% raises help
• ✅ Maximize tax-advantaged accounts — 401(k), IRA, Roth, etc.
• ✅ Diversify investments — balance risk and return
• ✅ Review plan yearly — adjust for life changes

Advanced Planning Tips

• Use Real vs Nominal Returns: Subtract inflation from return for real growth
• Sequence of Returns Risk: Poor early returns hurt more
• Healthcare & Long-Term Care: Plan for rising medical costs
• Social Security: Coordinate withdrawals with pension income
• Required Minimum Distributions (RMDs): Know when you must withdraw