Capital Needed for a Desired Pension
Calculates the capital needed at the start of retirement to draw a fixed pension over a given period (capital fully used up at the end).
Enter your own numbers and press "Calculate" – or load an example on the right; "Type in" replays it on the device.
Behind a seemingly small monthly pension stands a large amount of capital. Only those who know the need understand why they must save in good time – and that awakens their own urge to save.
→ Story & full explanation: How much does a $2,000 pension cost?
An inflation-proof pension costs many times the nominally equal one. Without an inflation adjustment you systematically plan too tightly and end up in old age with too little.
→ Story & full explanation: Capital needed for an inflation-proof pension
The present value reverses compound interest: each future pension payment is discounted because a dollar in 20 years is worth less today. The sum of all these discounted payments is the capital that must suffice at the start of retirement. Takeaway: behind a small monthly pension sits a large pool of capital.
Present value of an ordinary annuity.