Should I take the lump sum or the pension?

The pension is safer and lasts for life; the lump sum gives flexibility and can be passed on. Compare the break-even return with what you can realistically earn, and consider your health and other income.

Is a pension lump sum taxable?

Yes, unless you roll it directly into an IRA. A direct rollover keeps it tax-deferred until you withdraw.

Are these calculators free?

Yes. Every calculator is free with no sign-up. Clearly labeled ads keep it that way.

Calculations run in your browser. Share links put inputs in the URL, which can be read by anyone you send it to and is sent to the hosting server when opened. Avoid sharing sensitive numbers. Currency conversion requests public exchange rates.

How accurate are the results?

Results follow the formulas and assumptions shown, with normal rounding and numerical limits. Taxes, rates and health guidance can change, so treat these as estimates and confirm important decisions with a qualified professional.

Pension Calculator

Compare a pension lump sum to monthly payments, and single to joint.

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Pension Calculator

Lump sum or monthly pension: which is worth more?

Retirement age

years

Life expectancy

years

Lump sum offer

Monthly pension

Pension cost-of-living raise

% / year

Return on the lump sum

The lump sum is worth more

$17,641

Pension value today $382,359 vs lump sum $400,000

Monthly income the lump sum can payThrough age 85 at 5%: $2,615.35
Present value of the pension: $382,359
Total pension payments: $600,000
Break-even returnThe lump sum wins if you can earn more than this: 4.45%

Payments start at retirement and last until your life expectancy. The pension is guaranteed by the plan (and in part by the PBGC); a lump sum carries investment risk but can be left to heirs. Estimates for planning only, not financial advice.

Pension received vs lump sum left

Pension received so far
Lump sum balance if you draw the same income

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How the pension calculator works

A monthly pension is worth the present value of every payment you expect to receive: each payment is discounted back to today at the return you could earn on the lump sum. If that value is higher than the lump sum offer, the pension is the better deal on paper.

The break-even return is the rate at which both options are worth the same. If you are confident you can earn more than that after fees, the lump sum comes out ahead; if not, or if you expect to live longer than average, the pension usually wins.

A joint and survivor option pays less each month but keeps paying your spouse after you die. Compare the two using both of your life expectancies.

Using and checking your result

Published by JustYourCalculator. Check the units and assumptions above, and compare a known example before relying on the output. Calculations use browser arithmetic and may round displayed values.

This is an educational estimate, not a lender quote, tax filing calculation or investment recommendation. Actual costs depend on current rules, fees and your circumstances. Verify important decisions with official sources and a qualified adviser.

Share links may contain your input values. Anyone with the URL can read them; avoid sharing sensitive personal or financial information.