Pension vs. Lump Sum Calculator
Compare a monthly pension with a lump sum buyout offer. Find the break-even age — and see which option pays more if you live to your expected age.
Your pension and lump sum details
Your monthly pension benefit at retirement.
The one-time lump sum your employer is offering.
What you'd earn by investing the lump sum.
Annual increase to your pension payment.
Pension vs. lump sum: key concepts
A pension provides guaranteed monthly income for life — reducing longevity risk and market risk. A lump sum gives you full control and the potential for higher returns, but requires careful investment management and exposes you to the risk of outliving your money.
How the break-even age is calculated
The break-even is the first age at which cumulative pension payments catch up to the lump sum's accumulated value (if invested at your specified rate). Before that age, you've received less in pension payments than the lump sum would have grown to. With a high enough investment return, the still-compounding lump sum can move back ahead later in the projection, so the calculator's final verdict compares the two totals at your life expectancy.
See our methodology for the full formulas and assumptions behind every calculator.