Pension Calculator
Estimate a Defined Benefit (DB) pension's annual/monthly payout, replacement ratio and total received using final salary × accrual rate × years of service.
Input Data
Results
Cumulative Pension Received
At a glance:A Defined Benefit (DB) pension pays final average salary × accrual rate per year × years of service, usually capped (e.g. ≤ 80% of final salary). The replacement ratio = annual pension ÷ pre-retirement salary and is key to assessing post-retirement living standards (often aimed at 60%–80%+).
Formula
Uncapped annual = final salary × accrual% × service years.
Cap: annual ≤ final salary × 80%.
Monthly = annual ÷ 12.
Replacement ratio = annual ÷ final salary × 100%.
Total received = annual × (life expectancy − retirement age).
How to Use
- Enter your final average salary before retirement.
- Enter years of service and accrual rate (often 1.5%–2.5%).
- Set retirement age and life expectancy to see annual/monthly pension, replacement ratio and total.
FAQ
What is DB vs DC?
A DB scheme pays a formula-based, relatively certain pension (as this calculator models); investment risk sits with the employer/scheme. A DC scheme (like Hong Kong's MPF) depends on contributions and investment returns, so the payout is market-driven, not fixed. This calculator estimates only the DB portion.
What replacement ratio is enough?
It measures retirement income relative to before. A common guideline is 60%–80% to roughly maintain living standards; if your DB ratio is lower, you need personal savings, DC accounts or investments to fill the gap. This tool shows the gap quickly.
Do accrual rate and cap matter much?
Yes. At final salary $600k, 30 years, 2% accrual → $360k/yr (60% ratio); at 1.5% → $270k (45%). The 80% cap binds with long service and high accrual, limiting the maximum payout.
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References
Content review: Calculatorism Finance Team. Results for retirement planning reference only; actual per your pension scheme rules.