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Traditional defined-benefit pensions calculate your retirement income from a formula based on your salary and years worked, rather than an investment account balance.
This calculator estimates your annual and monthly pension using the standard final-salary formula.
How it works
Enter your final annual salary, years of service, and your plan's accrual rate (check your plan documents — commonly 1%–2% per year). The calculator multiplies these together to estimate your annual pension.
- Enter final annual salary ($).
- Enter years of service.
- Enter accrual rate per year of service (%, often 1–2%).
- Click Calculate to see your results.
Examples
$80,000 salary, 25 years, 1.5% accrual
A final salary of $80,000 with 25 years of service and a 1.5% accrual rate produces an estimated $30,000 annual pension — 37.5% of final salary.
Who should use it
- Estimating retirement income from a public sector or union pension plan.
- Comparing pension income against other retirement savings for overall retirement planning.
Industry applications
- Public sector and union benefits administration
- Retirement planning and financial advising
Advantages
- Uses the standard, widely applicable final-salary pension formula.
- Shows the pension as a percentage of final salary for quick context.
Limitations
- Doesn't account for cost-of-living adjustments or more complex tiered pension formulas.
Common mistakes to avoid
- Using your current salary instead of your projected final (or final average) salary at retirement.
- Misreading the accrual rate — a small difference (like 1.5% vs 2%) meaningfully changes the estimate over a long career.
Best practices
- Double-check your plan's exact accrual formula in your benefits documentation, since some plans use more complex tiered or average-salary formulas.
Tips
- Working additional years of service has a compounding effect on a pension formula — it increases both the years-of-service multiplier and often your final salary at the same time.