Pension Value Calculator
Calculate the lump sum equivalent of a defined benefit pension.
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The monthly pension amount you'll receive
Common questions
What is a defined benefit pension?
A defined benefit (DB) pension promises a specific monthly income for life, usually based on years of service and final salary. It's the old-style pension that most private sector employees have lost but government employees in many countries still receive. The employer bears the investment risk, not you.
How do I calculate my EPF pension in India?
EPS (Employee Pension Scheme, part of EPF) provides pension based on: Pensionable Salary × Pensionable Service / 70. Pensionable salary is capped at ₹15,000/month. Maximum pension: ₹15,000 × 35 / 70 = ₹7,500/month. This is a relatively modest amount — supplement it with NPS or mutual funds.
Is a lump sum or monthly pension better?
Monthly pension is better if you're worried about outliving your money or don't trust yourself to manage a lump sum. Lump sum is better if you have health issues (shorter expected life), want to leave an inheritance, or are confident you can invest it well. Many retirees do best with a hybrid: secure some guaranteed income (pension, annuity) and invest the rest.
What is a commutation of pension?
Government employees can commute (convert) part of their pension to a lump sum at retirement. Usually up to 40% is commutable. The lump sum calculation uses government-prescribed factors based on age. After commutation, the monthly pension is reduced proportionally for 15 years, then restored.
How does inflation affect a fixed pension?
A fixed pension of ₹30,000/month loses purchasing power every year. At 6% inflation, its real value halves in about 12 years. Government pensions (like Central Government) have Dearness Allowance (DA) that partially compensates for inflation. Private annuities are usually fixed — this is why buying inflation-linked or increasing annuities is valuable even at a lower initial rate.