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Pension Calculator: Estimate Your Retirement Income From Contributions & Growth

The Pension Calculator projects the future value of your pension fund from today until retirement and translates that into an estimated monthly pension. Enter your current age, target retirement age, annual contributions, and any current fund value to see how your savings and compounding can fund retirement income.

1) What the Calculator Does

This tool models the growth of a pension pot using compound returns on both your existing balance and the contributions you add each year. At retirement, the calculator summarizes: total contributions made, the total pension fund value, and a monthly income estimate based on standard annuity-style math (drawing an income from a pot over a retirement period).

2) Inputs

Input Description
Current Age Your age today. Used to determine how many years of contributions and growth occur before retirement.
Retirement Age The age you plan to stop working. The years between current age and this number form your accumulation period.
Annual Contributions The amount you add to the pension each year (employee + employer, if applicable). Assumed added at regular intervals.
Current Pension Fund Value Your existing pension balance today. This grows with compounding returns until retirement.
(Optional) Assumptions Some versions include assumed annual return before/after retirement and a retirement duration. If not shown, the tool uses sensible defaults.

3) How It Works (Formula)

Accumulation to retirement

The future value of your pension pot at retirement combines growth on your starting balance and growth on each contribution:

FV = P0(1 + r)n + C · [((1 + r)n − 1) / r]

Where:
P0 = current pension value, C = annual contribution, r = assumed annual return during the saving years, n = years until retirement.

Translating the pot into a monthly pension

If you draw an income from the pot over N months in retirement and the money continues to earn a monthly rate i, the estimated monthly payment is:

Payment = FV · [ i / (1 − (1 + i)−N) ]

This is standard annuity math. If the tool does not expose i (post-retirement return) and N (retirement length), it applies default assumptions to produce the “Estimated Monthly Pension.”

4) Outputs

Output What It Means
Estimated Monthly Pension The income you could withdraw each month in retirement based on your projected fund size and assumptions about returns and duration.
Total Contributions The total amount you personally (and optionally your employer) contributed over the accumulation years.
Total Pension Fund Your projected pot value at retirement, combining contributions and compound growth.

5) Practical Use Cases

  • Retirement Readiness Check: See if current saving habits will meet your income target.
  • Contribution Tuning: Test how increasing annual contributions affects your monthly pension.
  • Timing Decisions: Compare retiring at 60 vs. 67 to understand the trade-off between working years and income.
  • Scenario Planning: Explore different return assumptions or retirement durations (if available) to stress-test outcomes.

6) FAQ

Does the pension calculator include employer matching?
If your plan includes matching, add it to “Annual Contributions” (employee + employer). Some employers vary match by year—model an average for conservative planning.
What return rate does the calculator use?
If a return field is shown, you control it. If not, the widget applies a sensible long-term average for diversified retirement portfolios. For conservative planning, test lower returns.
How is the monthly pension estimated?
The tool converts your projected pot at retirement into a level monthly payment using annuity math: Payment = FV · [ i / (1 − (1 + i)−N) ], where i is the monthly return during retirement and N is the number of months you plan to draw income.
What if I plan to keep investing after I retire?
That’s common. The formula allows for growth in retirement (a positive i). If you expect a very conservative approach, use a lower i to avoid overestimating income.
Can I run scenarios for early retirement?
Yes—lower the retirement age and review how the shorter accumulation period and longer drawdown affect the result. You may need higher contributions to support an earlier date.
Is the result guaranteed?
No. Results are estimates based on assumptions. Markets, fees, taxes, and personal circumstances vary. Use the output as a planning guide, not a promise.

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