Pension Calculator
Compare lump sum payouts versus monthly pension income
Lump sum payout or monthly pension income?
Compare the financial benefits of taking a lump sum payout versus receiving monthly pension income. This calculator helps you determine which option provides better value based on your life expectancy and investment returns.
* Please note that the calculation above assumes that the lump sum payment rollover (transfer) to tax deferred investment account such as IRA etc. without being taxed upfront. If the lump sum payment is taxable, you can use the after-tax amount in calculation.
Pension Calculator
Option 1: Lump sum payment
Option 2: Monthly pension payment
Pension vs Lump Sum: Which is Better?
Choosing between a pension and lump sum payout is one of the most important retirement decisions. A pension provides guaranteed monthly income for life, while a lump sum gives you immediate control over your retirement savings and potential for higher returns through investment.
The breakeven analysis helps you determine at what age the pension becomes more valuable than the lump sum. Factors to consider include your life expectancy, investment returns, inflation protection, and need for guaranteed income versus flexibility.