Pension Calculator
Project total pension received with COLA growth and its value in today's money.
Pension Details
Total Pension Received
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
On this page
Pension Calculator — total value, COLA and real purchasing power
A monthly pension may sound simple, but its real value depends on how long it lasts and how it grows (or shrinks) relative to inflation. This calculator projects your total pension received, the impact of a COLA (cost-of-living adjustment), and the inflation-adjusted real value.
Why pension math matters
A $40,000/month pension with 3% annual COLA for 25 years totals about $1.74 million — far more than the $1.2 million without COLA.
Without COLA, inflation halves your purchasing power roughly every 12 years at 6% inflation.
Deciding to take a lump sum vs a pension? Compare the pension's present value against the lump sum offer — this calculator shows the lifetime picture.
Pension vs lump sum (commutation)
Many schemes let you 'commute' part of your pension into a one-time lump sum, reducing the monthly amount.
The breakeven question: if the lump sum invested earns more than the pension you give up, commutation wins.
Typical factor: 1/3rd of pension commuted for a lump sum of about 8–11× that third, depending on age and scheme rules.
How to use this calculator
- Enter your monthly pension amount.
- Add the annual COLA (0 if your pension is fixed).
- Enter the inflation rate to see real value.
- Set the number of retirement years.
- Read total pension, final monthly amount and inflation-adjusted (real) total.
Pro tips
- Ask your employer for the COLA history before assuming a rate.
- If your pension lacks COLA, invest some of it to offset inflation.
- Compare the pension's present value with any commutation offer.