Pension Calculator

Defined-benefit income from salary, service and accrual rate.

Medicare premiums are deducted from Social Security cheques once enrolled, and the Part B premium rises most years, which quietly trims retirement income. The private pensions that remain usually compute a benefit from years of service and final average salary rather than from an account balance.

American retirement income is assembled from three places. A 401(k) lets an employee defer salary up to an annual IRS limit, with catch-up contributions past 50 and often an employer match; IRAs carry lower limits of their own; and required minimum distributions begin at 73 for most savers under current rules.

Social Security adds a benefit built from a 35-year earnings record, while private pensions have largely given way to defined-contribution plans.

Contribution limits, catch-up ages and RMD ages are set in law and revised most years, so treat the constants here as the current rules rather than as fixed facts.

Sequence matters once withdrawals begin: a market fall in the first few years of retirement does more lasting damage than the identical fall a decade later, because the money sold to fund income is no longer there to recover. Cash buffers and spending guardrails exist for that reason.

Pension Calculator sits with the rest of the library's finance work, and it rests on the same retirement-income arithmetic the way a lender's disclosure or a bank statement does. Its answer is only as good as the assumptions standing behind it.

The quantities it works from — final average salary, years of service and accrual rate per year — are the ones a real retirement-income question actually turns on, and each carries a convention of its own, set out below.

Money questions in America turn on the same few trade-offs: how long a balance is carried, what rate applies to it, and whether the money is being paid down or built up. Inflation sits behind all of them, since a figure that looks generous at today's prices buys less at tomorrow's, and comparisons across decades are made in real, inflation-adjusted terms.

American products also disclose their costs in prescribed ways, from the APR on a consumer loan to the annual percentage yield on a deposit account.