Pension vs Lump Sum Present Value Calculator
Compare a fixed-duration pension payment stream with a cash alternative on a common present-value basis.
Your result
FINANCIALEnter your values and select calculate.
On this page How it works & practical examples
How to use the Pension vs Lump Sum Present Value Calculator
Compare a fixed-duration pension payment stream with a cash alternative on a common present-value basis. The first pension payment is at the end of month one.
The calculation
Worked example
$1,000 monthly for 20 years at 0% discount is $240,000, or $40,000 above a $200,000 lump sum.
Assumptions and limits
Payment duration is an assumption, not a life-expectancy estimate. Survivor benefits, inflation adjustments, taxes and plan guarantees are not valued.
Common questions
Which inputs should I use?
Compare a fixed-duration pension payment stream with a cash alternative on a common present-value basis. The first pension payment is at the end of month one.
What does the result exclude?
Payment duration is an assumption, not a life-expectancy estimate. Survivor benefits, inflation adjustments, taxes and plan guarantees are not valued.