How this number is made
Many pensions pay a percent of final average pay for each year of service. The percent and the definition of pay are in the plan document. This page multiplies the three numbers and does not know your plan’s early-retirement reduction.
- Final average pay is whatever the plan averages, often the last three or five years.
- The factor is the plan’s percent, often around 1% to 2% per year. Type yours.
Formula
Annual pension = final pay × percent per year × years of service.
Worked example
With the figures already in the form, pension per month before tax is $2,500.00.
Questions
Is this my plan?
Only if your plan is this simple. Offsets, social-security integrations, and early-retirement factors are not here.
Is it inflation protected?
Only if the plan says so. This estimate does not grow after it starts.