Estimate the age when cumulative after-tax pension payments catch up with an after-tax lump-sum offer. The calculator can include an annual pension increase and reports the cash-recovery point in months and years. This is intentionally a nominal comparison: it does not assume a return on invested lump-sum assets, discount future pension payments, model mortality, or value survivor and guarantee provisions.
After-tax lump sum = offer × (1 − lump-sum tax rate)
Cumulative pension = Σ monthly pension × (1 − pension tax rate) × (1 + COLA)completed years
Use the main result as a scenario estimate and compare it with alternative assumptions. Small changes in tax, return, inflation, or payment terms can compound into meaningful differences.
This is an educational estimate, not tax, investment, insurance, or legal advice. Actual taxes and contract benefits depend on jurisdiction and plan terms.
A $500,000 lump sum taxed at 22% equals $390,000 after tax. A $3,200 monthly pension taxed at 22%, with no COLA, reaches that amount after about 157 months—near age 78.1 when starting at 65.
No. It compares nominal after-tax amounts without growth on the lump sum.
The entered increase is applied once after each completed year of monthly payments.
Different tax assumptions can materially change how long pension payments take to match spendable lump-sum value.
No. Survivor and guarantee provisions should be valued separately.
Treat that as one factor among health, longevity, liquidity, investment risk, and beneficiary goals—not as a decision by itself.
| Factor | Modeled? |
|---|---|
| Income tax | Yes, with user-entered rates |
| Pension COLA | Yes |
| Lump-sum investment return | No |