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Choosing between pension options can be a difficult task. Choosing an option that guarantees your spouse pension benefits after your death means extra security but also lower monthly benefits. On the other hand, choosing a pension option that only pays through your lifetime can provide larger monthly payments, but requires a lump sum to protect your spouse if she outlives you. Use this calculator to help decide which pension option works best for your particular retirement needs.
Definitions
Current age Your current age.
Retirement age Age you are going to retire and begin receiving your pension benefits.
Your life expectancy Your estimated age of death. This is the age at which Single Annuitant Pension benefits would end.
Spouse age The current age of your spouse.
Spouse's life expectancy The estimated age of your spouse's death. This is the age they will no longer require benefits.
Single pension at retirement The monthly pension payment you will receive if you choose a single annuitant pension.
Joint pension at retirement The monthly pension payment you will receive if you choose a joint survivorship pension.
Insurance cost per thousand Your estimated cost of life insurance per thousand dollars of coverage per year. Please note that this is only an estimate, your actual costs can vary considerably depending on your health, sex and age. This calculator assumes that your life insurance has no cash value.
Indexed for COLAIf your pension is indexed for a Cost of Living Adjustment, check this box.
Rate of return on investments This is the annually compounded rate of return you expect from your investments. The actual rate of return is largely dependant on the type of investments you select. From January 1970 to December 2004, the average compounded rate of return for the S&P 500, including reinvestment of dividends, was approximately 11.5% per year. During this period, the highest 12-month return was 64%, and the lowest was -39%. Savings accounts at a bank pay as little as 1% or less. It is important to remember that future rates of return can't be predicted with certainty and that investments that pay higher rates of return are subject to higher risk and volatility. The actual rate of return on investments can vary widely over time, especially for long-term investments. This includes the potential loss of principal on your investment. For the purposes of this calculator, taxation is not factored into the results. If you pay taxes on the interest, dividends or capital gains from these investments, you may wish to enter your after tax rate of return.
Information and interactive calculators are made available to you as self-help tools for your independent use and are not intended to provide investment advice. We can not and do not guarantee their applicability or accuracy in regards to your individual circumstances. All examples are hypothetical and are for illustrative purposes. We encourage you to seek personalized advice from qualified professionals regarding all personal finance issues.
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