Understanding the pension calculator
A defined-benefit pension pays a guaranteed income in retirement, calculated from a formula rather than an account balance. The typical formula multiplies your final (or highest-average) salary by your years of service and by an accrual rate often around 1.5 to 2.5% per year. Thirty years at a 2% accrual, for instance, replaces 60% of final salary for life.
Pensions have grown rare in the private sector but remain common for public employees. Their great advantage is longevity protection: the income continues no matter how long you live, shifting investment and lifespan risk to the plan. Details vary widely vesting periods, cost-of-living adjustments, and survivor options all matter so confirm your plan's specific formula before relying on an estimate.
Results are estimates for education only and are not financial advice.