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Pension Calculator
Estimate the yearly and monthly income from a final-salary pension. Enter your salary, service, accrual rate and retirement age, then press Calculate to see the projected benefit.
Written by TopicDrill Editorial Team·Updated June 2026
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How the pension calculator works
This tool models a defined-benefit, or final-salary, pension. It first projects your salary forward to your chosen retirement age using the pay-rise rate you enter, then multiplies that final salary by your total accrual, which is years of service times the accrual rate. The result is the pension you would receive each year.
If your retirement age differs from the scheme's normal age, the tool applies an adjustment for each year early or late. The chart traces how the accrued benefit climbs year by year as your service and projected salary both grow.
A quick example
Suppose you earn $60,000 today, expect 2 percent annual raises, and retire at 65 with 30 years of service at a 1.5 percent accrual rate. Your salary grows to roughly $89,000, and 30 years times 1.5 percent gives 45 percent of that, an annual pension near $40,000, or about $3,300 a month before any timing adjustment.
Things to keep in mind
Real schemes differ on whether they use final or career-average salary, how they index payments, and what reductions apply for early retirement, so confirm the rules with your provider. For neutral guidance on retirement income, see Investor.gov. To plan a separate savings pot alongside the pension, try our retirement calculator.
Frequently asked questions
How is a defined-benefit pension calculated?
A defined-benefit pension is usually years of service times an accrual rate times your final or average salary. For example 30 years of service at an accrual rate of one and a half percent gives 45 percent of your final salary as an annual pension.
What is the accrual rate or multiplier?
The accrual rate is the share of salary you earn as pension for each year you are in the scheme. A rate of one sixtieth is about one point six seven percent per year, while one eightieth is one point two five percent per year. A higher rate builds a larger pension for the same service.
Why does retiring early reduce my pension?
If you take the pension before the scheme's normal retirement age it is paid for longer, so most schemes apply a reduction for each year you draw it early. This tool lowers or raises the benefit by the adjustment percentage you enter for every year away from the normal age.
What is a replacement ratio?
The replacement ratio is your annual pension divided by your final salary, shown as a percent. It tells you how much of your working income the pension replaces. Many people aim for a total of around two thirds of pre-retirement pay once state and personal savings are added.
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