Pension and annuity are easy to confuse because both involve regular retirement money, but the two calculators on this site work at different levels of abstraction. The pension calculator is a scenario worksheet: it models a career of salary-based employee and employer contributions, annual salary changes, and inflation, then applies a draw rate you enter to illustrate monthly income. The annuity calculator is generic cash-flow math: it values a stream of equal deposits or withdrawals against an opening balance, with no salary, employer, or inflation inputs. The pension page is not a defined-benefit entitlement estimate, and the annuity page is not an insurance annuity quote.
What each calculator does
The pension calculator takes start age, retirement age, salary, employee and employer contribution percentages, annual return, inflation, and a draw rate. Each month the existing balance grows by the annual return divided by 12, then that month’s salary-based contributions are added at month end; salary changes after every twelve-month block. At retirement it converts the ending balance into today’s dollars using the inflation assumption and applies the entered draw rate to show an illustrative monthly amount. At its defaults (age 30 to 65) the scenario produces a total value of about $604,148.91, about $302,091.14 in today’s dollars, and about $1,006.97 per month at a 4 percent draw assumption. The page stresses that the draw rate is user-entered — 4 percent is not fixed or represented as safe — and that the tool is a worksheet, not a promise of pension benefits.
The annuity calculator models equal payments at regular intervals. It has two modes. Deposit/grow adds a payment stream to an opening balance and returns a future value; withdrawal/payout subtracts the stream and returns the balance left after the term, along with an estimated sustainable payment. You enter the opening balance, payment amount, payment frequency, annual return, term, and ordinary versus annuity-due timing. The periodic rate is the annual rate divided by the frequency, and the payment count is the term times the frequency, rounded. In its default deposit example, a $10,000 balance with $500 monthly deposits at 6 percent for 10 years reaches about $100,133.64. In its withdrawal example, withdrawing $1,500 monthly from $250,000 at 4 percent for 15 years leaves about $85,939.67, with a sustainable payment of about $1,849.22 per month. The page is explicit that this is time-value-of-money math, not an insurance annuity quote — it does not price mortality credits, surrender charges, or guarantees.
Side-by-side
| Pension calculator | Annuity calculator | |
|---|---|---|
| Model type | Accumulation scenario worksheet with salary-based contributions | Generic cash-flow math for equal deposits or withdrawals |
| Key inputs | Start and retirement age, salary, employee and employer contribution %, return, inflation, draw rate | Opening balance, payment amount, frequency, annual return, term, ordinary vs annuity due |
| Salary and employer money | Yes — salary-based employee and employer contributions, salary changes annually | No |
| Inflation adjustment | Yes — ending balance converted to today’s dollars | No |
| Primary output | Total value, today’s-dollar balance, illustrative monthly amount at the entered draw rate | Future value (deposit mode) or ending balance (withdrawal mode), plus sustainable payment in withdrawal mode |
| Income step | Entered draw rate applied to the today’s-dollar balance | Withdrawal mode models a payment stream against the balance |
| Guarantees or insurance pricing | No — not a defined-benefit entitlement estimate | No — not an insurance annuity quote |
When to use which
Use the pension calculator when you are modeling a career of salary-linked contributions — including employer money and annual raises — and want to see how inflation erodes the ending balance and what a user-chosen draw rate implies as monthly income. It is the right tool when the question is “if my contributions and raises follow this path, what balance and income scenario results?” Treat it as a scenario worksheet and remember that a real pension promise depends on your plan’s documents and rules, which the tool does not model.
Use the annuity calculator when your cash flow is a fixed, regular payment — monthly deposits into an account, or systematic withdrawals from a balance — and you want the math of that stream against an opening balance. It answers “what does this deposit stream grow to?” and “does this withdrawal stream outlast the balance, and what would a sustainable payment be?” It has no salary, inflation, or employer inputs, so it is the cleaner tool for a pure stream question.
The two pages overlap at one point: the pension calculator’s draw step is itself an annuity-style calculation. If you already have a lump sum and want to check what regular income it supports, the annuity calculator’s withdrawal mode (or the more focused annuity payout calculator) does that directly. If you are building the lump sum through salary-based contributions first, the pension page covers the accumulation phase. For growth of equal deposits without an opening balance, the future value of annuity calculator is the narrower tool.
Limits and disclaimer
Both pages are educational and are not financial, tax, investment, or legal advice. Both depend on return, contribution, and (for the pension page) inflation assumptions that the user enters — real investments do not deliver steady returns, and a negative ending balance in withdrawal mode is a warning that the planned stream is too large for the assumptions. The pension page excludes tax, plan terms, vesting, guarantees, adequacy, survivor options, and entitlement, and its 4 percent default is not presented as a safe withdrawal rate. The annuity page does not price mortality credits, surrender charges, rider guarantees, or insurer-specific rules. For a real pension or annuity contract, check the governing plan or contract documents and get professional guidance before making decisions.