Estimate your future monthly income by combining your private savings and pension benefits.
Your Retirement Projection
Total Nest Egg at Retirement:$0
Monthly Income from Savings:$0
Monthly Pension Benefit:$0
Total Monthly Income:$0
function calculateRetirementIncome() {
var curAge = parseFloat(document.getElementById('retCurrentAge').value);
var retAge = parseFloat(document.getElementById('retPlannedAge').value);
var curSavings = parseFloat(document.getElementById('retCurrentSavings').value);
var monthlyContrib = parseFloat(document.getElementById('retMonthlyContrib').value);
var annualReturn = parseFloat(document.getElementById('retGrowthRate').value) / 100;
var pension = parseFloat(document.getElementById('retPensionBenefit').value);
var withdrawalRate = parseFloat(document.getElementById('retWithdrawalRate').value) / 100;
var desiredIncome = parseFloat(document.getElementById('retDesiredIncome').value);
if (isNaN(curAge) || isNaN(retAge) || retAge 0) {
fvContributions = monthlyContrib * ((Math.pow(1 + monthlyRate, monthsToRetire) – 1) / monthlyRate);
} else {
fvContributions = monthlyContrib * monthsToRetire;
}
var totalNestEgg = fvSavings + fvContributions;
var monthlyFromSavings = (totalNestEgg * withdrawalRate) / 12;
var totalMonthlyIncome = monthlyFromSavings + pension;
document.getElementById('resTotalNestEgg').innerText = '$' + totalNestEgg.toLocaleString(undefined, {maximumFractionDigits: 0});
document.getElementById('resMonthlySavings').innerText = '$' + monthlyFromSavings.toLocaleString(undefined, {maximumFractionDigits: 0});
document.getElementById('resPensionValue').innerText = '$' + pension.toLocaleString(undefined, {maximumFractionDigits: 0});
document.getElementById('resTotalIncome').innerText = '$' + totalMonthlyIncome.toLocaleString(undefined, {maximumFractionDigits: 0});
var statusMsg = document.getElementById('retStatusMessage');
if (totalMonthlyIncome >= desiredIncome) {
statusMsg.innerText = "Congratulations! You are on track to meet your retirement goal.";
statusMsg.style.backgroundColor = "#d4edda";
statusMsg.style.color = "#155724";
} else {
var deficit = desiredIncome – totalMonthlyIncome;
statusMsg.innerText = "You may fall short by $" + deficit.toLocaleString(undefined, {maximumFractionDigits: 0}) + " per month. Consider increasing contributions.";
statusMsg.style.backgroundColor = "#f8d7da";
statusMsg.style.color = "#721c24";
}
document.getElementById('retCalcResult').style.display = 'block';
}
Understanding Retirement Planning with a Pension
Planning for retirement is significantly different when you have a Defined Benefit Pension. Unlike a 401(k) or IRA where you are responsible for the entire balance, a pension provides a guaranteed monthly check for life. This calculator helps you bridge the gap between what your pension provides and what you need to live comfortably.
The Formula for Retirement Success
To determine if you are prepared, the calculator uses three primary components:
Compounded Savings: Your current balance and monthly contributions are projected forward using your expected rate of return.
The Pension Floor: This is your guaranteed income. It acts as a safety net, meaning your personal savings don't have to work as hard.
Safe Withdrawal Rate: We apply a percentage (often 4%) to your total projected nest egg to determine how much you can sustainably take out each month without running out of money.
Example Calculation
Imagine Sarah, a 40-year-old teacher planning to retire at 65:
Current Savings: $100,000
Monthly Contribution: $400
Pension Benefit: $2,500 per month
Expected Return: 6%
By age 65, Sarah's $100,000 grows to approximately $429,000, and her monthly contributions add another $270,000, totaling a nest egg of $699,000. Using a 4% withdrawal rate, her savings provide $2,330/month. When added to her $2,500 pension, her total retirement income is $4,830 per month.
Why the "Safe Withdrawal Rate" Matters
The 4% rule is a common benchmark in financial planning. It suggests that if you withdraw 4% of your portfolio in the first year of retirement and adjust for inflation thereafter, your money has a high probability of lasting 30 years. When you have a pension, you may feel comfortable using a slightly higher withdrawal rate (like 4.5% or 5%) because your basic needs are covered by the guaranteed pension payment.
Key Factors to Consider
When using this calculator, keep in mind that inflation will reduce your purchasing power over time. If your pension does not include a Cost of Living Adjustment (COLA), its value will effectively decrease every year. It is often wise to aim for a "Desired Monthly Income" that is slightly higher than your current expenses to account for rising healthcare and living costs.