Pension Calculator
A defined-benefit pension is built from years of service and an accrual rate. Each year of service earns a percentage of your final average salary, and the total is your annual pension for life.
Annual pension
$26,250.00
- Monthly pension
- $2,187.50
- Replacement ratio
- 37.50%
Values update as you type. This calculator covers the single scenario its formula assumes — see Common Mistakes for what it leaves out.
The formula this calculator uses
Annual = years x accrual rate x final salary
- Years
- Years of credited service
- Accrual
- Percent of salary earned per year
- Salary
- Final average salary
How to check the result by hand
- 1
Find your years of credited service
Count the years you actually earned a benefit for, excluding unpaid leave and years before joining the plan.
- 2
Use the final average salary
Take the plan's averaging period, usually the highest three or five years, not a single year's pay.
- 3
Enter the accrual rate
Use the percentage per year of service set out in the plan document, commonly one to three percent.
- 4
Multiply the three inputs
Years times accrual rate times final salary gives the annual pension, and dividing by twelve gives the monthly figure.
- 5
Check the replacement ratio
Divide the annual pension by the final salary to see what share of pre-retirement income it replaces.
For worked examples, common mistakes and the limits of this formula, read the full How To Calculate Pension page.