Pension vs. Lump Sum Analyzer

Your Financial Profile

Monthly Pension Amount

The monthly payment your employer offers if you choose the pension option. Subject to plan terms and funding status.

Lump Sum Offer

The one-time cash payout alternative to the pension. You'd invest and manage this yourself.

Current Age

Your current age. Used to calculate the time until pension payments begin.

Pension Start Age

The age you plan to start receiving pension payments (typically 55-67).

Life Expectancy 85

Your expected lifespan. Used to project total lifetime income and plan accordingly.

Expected Return (%) 6%

Expected annual return if you invest the lump sum. Higher returns favor the lump sum.

Tax Rate (%) 25%

Your effective tax rate on investment income and pension withdrawals.

Annual COLA (%) 2%

Cost-of-living adjustment — the annual increase applied to your pension payment.

Include Survivor Benefit?

Your Comparison Results

Pension

Total Lifetime Income

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After-Tax Income

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Legacy Value

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At Age 85

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Advantages

Steady income stream for life (subject to plan solvency)
Not directly exposed to market fluctuations
May include inflation adjustments (COLA)
Generally simpler to manage

Considerations

No inheritance for heirs
Less liquidity access
Dependent on provider solvency

Lump Sum

Total Lifetime Withdrawals

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After-Tax Withdrawals

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Legacy Value

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At Age 85

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Advantages

Full inheritance for heirs
Control & flexibility
Potential for growth
No provider dependency

Considerations

Market & investment risk
Requires discipline
Possible depletion
Tax implications

Breakeven Analysis

Breakeven Return Rate

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Annual return needed for lump sum to match pension

Breakeven Age

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Age when pension cumulative value exceeds lump sum

Lump Sum Status at 85

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Whether lump sum is depleted

Year-by-Year Projection