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Pension vs. Lump Sum Calculator

See how many years it takes for the pension to “pay back” the lump sum, and how your life expectancy affects the choice.

Understanding the Choice

Many employers offer a choice: take a monthly pension for life or take a lump sum and invest or spend it. This calculator compares the two by showing how many years of pension payments it takes to match what the lump sum would grow to if invested at an assumed rate. If you live past that “break-even” age, the pension typically comes out ahead; if you don’t, the lump sum (or what’s left of it) may be worth more to you or your heirs.

Tip: Use your plan’s official lump sum and monthly pension numbers. The growth rate should reflect how you’d invest the lump sum (e.g. 4–6% for a balanced portfolio).

Your Numbers

Monthly Pension ($)
Before tax; single-life or joint-life amount
Lump Sum Offered ($)
One-time amount if you give up the pension
Your Current Age
Age when pension or lump sum starts
Assumed Growth Rate on Lump Sum (%)
Annual return if you invest the lump sum
Plan To Age (Life Expectancy)
Used to show total received by end of plan

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