Pension Plan Retirement Options
Use this calculator to help decide between joint survivorship and single survivorship pension options.
How the pension plan retirement options calculator works
It discounts your monthly pension over your expected remaining lifetime to a present value and compares it against the lump-sum offer, showing which is worth more in today’s dollars.
Worked example: with lump-sum offer of $350,000, monthly pension instead of $2,000 and your age of 65, the pension plan retirement options shows better value of Lump sum.
- Lump-sum offer
- $350,000
- Pension present value
- $319,856
- Total pension if paid out
- $528,000
- Payments expected
- 22 yrs
The formula
Pension present value = monthly × (1 − (1 + r)⁻ⁿ) ÷ r, over the months from your age to life expectancy; compared to the lump sum.
Results are estimates for educational purposes and are not financial advice. Confirm exact figures with your lender, plan administrator or advisor.
Questions about the pension plan retirement options
Should I take a pension as a lump sum or monthly payments?
Compare the lump sum to the present value of the lifetime payments. Monthly payments give guaranteed income you cannot outlive; a lump sum gives control and a potential inheritance.
What factors beyond the math matter?
Your health and longevity, whether the pension has survivor benefits or inflation adjustments, your other income, and how disciplined an investor you would be with a lump sum.
Is a guaranteed pension safer?
It removes investment and longevity risk, but depends on the plan sponsor’s solvency (federal PBGC insurance covers many private pensions up to limits). A lump sum shifts those risks to you.
Is the Pension Plan Retirement Options free to use?
Yes. Every calculator on FinCalculators is completely free, with no sign-up, login or paywall. You can run as many scenarios as you like.