Pension Election Tool

What it does

Compares your pension's lump-sum buyout offer against the lifetime monthly options (single life / 50% J&S / 100% J&S) on present-value math. Shows cumulative income over time for each path so you can see when each crosses the lump sum invested.

Who this helps

Anyone with a defined-benefit pension making the one-time, irrevocable election decision at retirement. Often a $200K-$1M+ choice with no easy heuristic.

How to use it

1. Enter the lump-sum offer from your employer.
2. Enter the monthly amounts for each annuity option (single life / 50% / 100% J&S).
3. Pick a COLA assumption (most private pensions: 0%).
4. Enter your age, life expectancy, and your spouse's age + life expectancy.
5. Set the investment return you'd expect on the lump sum if you took it.
6. Read the present-value comparison and the verdict.

What it doesn't do

Doesn't model the PBGC guarantee limit (~\$87K/yr at 65 in 2026 for single-employer plans) — relevant if your former employer is at risk of insolvency. Doesn't model spousal PV separately when ages differ widely.