Lump sum vs. monthly pension — the verdict layer
Your employer is offering a lump sum in place of a monthly pension for life. The letter gives you the two numbers — but not the one number that decides it: what the monthly pension is actually worth. PensionVerdict computes it, with the same mortality-weighted math actuaries use, and shows its work.
The implied guaranteed return
The pension is, in effect, offering you a guaranteed rate of return for life. We solve for it exactly — the single most useful number in this decision.
Break-even age
The age at which the monthly checks add up to the lump sum — plus the mortality-weighted value of the pension, not just a raw multiplication.
The PBGC screen
Is your monthly benefit under the federal guarantee cap ($7,789.77/month at 65 in 2026)? Was your plan already sold to an insurer? No free calculator checks this. We do.
The internet's favorite shortcut is the "6% rule" — take the monthly pension if it equals 6% or more of the lump sum per year. It ignores how long you are likely to live, ignores any cost-of-living increase, ignores your spouse, and ignores whether your pension is even fully guaranteed. A pension decision made on a six-figure, can-never-be-undone election deserves the full math.
In 2025 alone, more than 740,000 pension participants were swept into pension risk transfer transactions (LIMRA). A GAO study of one year's lump-sum windows found roughly 500,000 offers — and found the offer packets omitted key decision information. The letter is not the analysis. This is the analysis.
Free calculators multiply your monthly check by a life expectancy you type in. We weight every year's payment by the probability you are alive to receive it, using the SSA Period Life Table.
Enter the lump sum, the monthly amount, your ages, COLA, and survivor election from your letter. The verdict is computed from your offer — not a scenario article about somebody else's.
Every result states its assumptions on its face. PensionVerdict is an educational tool — it shows you the numbers so you (and, if you choose, your own advisor) can decide with your eyes open.
Here is what each route actually gives you for this specific decision:
| Option | Cost | What you get | What it leaves out |
|---|---|---|---|
| Free calculators (e.g., Clark.com) | Free | Solid simulations of investing the lump sum; COLA-aware | Explicitly no PBGC / plan-solvency screen; no verdict, no decision record |
| Advisor retirement analysis | $1,750–$3,500 typical | A professional plan that includes this comparison | Weeks of process; the pension question is one line item in a much bigger engagement |
| DIY planning software (MaxiFi / Boldin) | $109–$120 per year | Full retirement modeling, including this analysis | A subscription for a one-time decision; no PBGC/PRT screen; steep learning curve |
| PensionVerdict | Free checker; $39 kit, one-time | Mortality-weighted verdict, implied return, break-even, PBGC/PRT screen, survivor decomposition, printable decision record | Not personalized financial advice — the math, with assumptions stated |
The federal guarantee has a cap — $7,789.77 a month at age 65 in 2026. Above it, part of your pension is unguaranteed if the plan fails. And if your plan was already bought out to an insurance company, PBGC coverage has ended. The kit walks your plan's exact status.
A joint-and-survivor election pays across three states of the world: both of you alive, only you, only your spouse. The kit lays out the expected money in each state, so the survivor choice stops being a guess.
A printable one-page record of your inputs, assumptions, and results. Six months from now — or when your spouse or family asks "why did we choose this?" — the reasoning is on paper, not in a browser tab.
The PensionVerdict Kit
$39 $1,750–$3,500 advisor analysis — one-time payment, no subscription.
Start with the free checker first. The kit unlocks in the same browser after checkout.
No. PensionVerdict is an educational tool. It performs arithmetic on the numbers and assumptions you enter and shows its work. It does not know your full situation and does not recommend a choice. For a personal recommendation, consult a fiduciary financial advisor or CPA — the kit's decision record is designed to make that conversation shorter and cheaper.
Each future year's payments are weighted by the probability of being alive to receive them (SSA Period Life Table, blended), adjusted for your pension's COLA, and discounted at the investment return you choose. The result is compared with the lump sum, and we also solve for the "implied guaranteed return" — the rate at which the two are worth exactly the same. The full methodology is printed under the checker results.
The Pension Benefit Guaranty Corporation is the federal agency that insures most private pensions. Its guarantee is capped: in 2026, the maximum guaranteed benefit is $7,789.77 per month for payments starting at age 65 (less if payments start earlier). If your benefit is above the cap and your plan fails, the excess is not guaranteed. If your plan was bought out to an insurer, PBGC coverage no longer applies at all. Our free checker screens for both.
Run the free checker today with the numbers from your letter — it takes two minutes. Then, if you want the full picture (survivor states, sensitivity, the week-by-week planner), the kit is built around your deadline. Do not let the deadline pass by default: in most windows, doing nothing is itself an election.
No. All math runs in your browser on this device. Nothing you enter is transmitted or saved on our servers.
Why the 6% rule misleads, and the two numbers — implied return and break-even age — that actually decide it.
What a pension risk transfer changes, what it doesn't, and the PBGC protection that quietly goes away.
The $7,789.77 monthly cap (2026) most offer letters never mention — and what happens above it.