ProMoney · Simulator
Pension: Lump Sum vs. Annuity
Take the lump sum, or the monthly check?
Assumptions
Pension payout rate
7%
Simple break-even
14.9 yr
Annual pension
$33,600
| Line | Value |
|---|---|
| Lump sum | $500,000 |
| Annual pension | $33,600 |
| Payout rate | 7% |
| Years to recover lump | 14.9 |
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Built by The Crimson Bench · Educational model, not financial advice
About the Pension: Lump Sum vs. Annuity
Compare a pension lump sum to lifetime monthly payments to see the payout rate and simple break-even.
It's built for directional planning: change any assumption and watch the whole projection move, the way a seasoned operator pressure-tests a plan before committing capital. Everything is computed live in your browser — nothing is sent anywhere.
How the Pension: Lump Sum vs. Annuity Works
The model takes 2 assumptions and returns 3 headline metrics plus a full breakdown. Here is exactly what goes in and what comes out — no black box.
The Inputs
| Assumption | Example value |
|---|---|
| Lump sum offer | $500,000 |
| Monthly pension | $2,800 |
Worked Example
Every figure below is produced by the live model using the example assumptions above. Change any input in the simulator to see your own numbers.
Pension payout rate
7%
Simple break-even
14.9 yr
Annual pension
$33,600
| Line | Value |
|---|---|
| Lump sum | $500,000 |
| Annual pension | $33,600 |
| Payout rate | 7% |
| Years to recover lump | 14.9 |
The Operator's Read
The pension effectively pays 7% a year for life. Take the annuity if you value longevity insurance and can't reliably beat that rate; take the lump if you want flexibility, can invest well, or want to leave an estate. Educational only.
Assumptions & Limitations
- •The model is deterministic: it projects your inputs forward with clear arithmetic, not a Monte-Carlo or probabilistic forecast. It shows one scenario at a time — run several to bracket a range.
- •Defaults are illustrative benchmarks, not your business. Replace every field with your real numbers before drawing conclusions.
- •It abstracts away taxes, financing, seasonality, and one-off events unless a field explicitly captures them. Treat the output as a directional estimate.
- •This is an educational tool, not financial, investment, tax, or legal advice. Validate real decisions with a qualified professional.
Frequently Asked Questions
What does the Pension: Lump Sum vs. Annuity calculate?
Compare a pension lump sum to lifetime monthly payments to see the payout rate and simple break-even. It takes 2 assumptions — Lump sum offer, Monthly pension — and returns Pension payout rate, Simple break-even, Annual pension, along with a full projection table you can export.
How do I use the Pension: Lump Sum vs. Annuity?
Enter your own figures in the input fields above — Lump sum offer, Monthly pension, and the rest. The model recalculates instantly and shows the resulting Pension payout rate and full breakdown. No sign-up needed to run it.
Is the Pension: Lump Sum vs. Annuity free?
Yes — you can run the simulator and see the headline results for free. Toolkit Pro unlocks the full projection table, Excel/PDF export, saved scenarios, and AI analysis: $180/mo, $1,728/yr, or unlock any 3 simulators for $20.
What's the difference between this and a free calculator?
A calculator answers one question. This simulator models the full picture — multiple linked assumptions, a projection table, and scenario comparison — the way an operator would build it in a spreadsheet, but instantly.
Who built the Pension: Lump Sum vs. Annuity?
The Crimson Bench's Ivy League-educated operators — the same people we deploy into C-suites. This is the self-serve version of a model they'd build inside a live engagement.
Is this financial advice?
No. The Pension: Lump Sum vs. Annuity is an educational modeling tool for directional planning — not financial, investment, tax, or legal advice. Validate any real decision with a qualified professional.
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The Crimson Bench · Est. 2002 · Founded in New York City
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