COLA (Cost of Living Adjustment) is the annual percentage increase many pension plans apply to benefits to offset inflation. A 3-4% COLA is common.

Why compare pension value in today's money?

Because future currency buys less, the nominal total overstates the real value. Discounting by inflation shows the true purchasing power of your pension.

Pension Calculator

Project total pension received with COLA growth and its value in today's money.

Pension Details

Monthly Pension (today's money)

Annual COLA Increase

Inflation Rate

Years in Retirement

yrs

Total Pension Received

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Value in Today's Money

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Final Monthly Pension

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Years of Payments

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How pensions are valued

The calculator compounds your pension by COLA each month to find the nominal total, then discounts every payment by inflation to find its real value. A pension with 3% COLA in a 5% inflation world still loses purchasing power over time — the gap between the two totals shows exactly how much.

Pension Calculator FAQ

Why does my pension need COLA?▶

Without COLA, a fixed pension buys less every year. Over 25 years at 5% inflation, its purchasing power drops by roughly two-thirds.

How do I value a pension vs a lump sum?▶

Compare the pension's value in today's money with the lump sum offered. If the lump sum is higher, you can often reproduce the income yourself with an annuity.