Inflation and COLA Pension Calculator

This page calculates the effects of inflation and your COLA (cost-of-living-adjustments) on your annual pension payment. It shows both the dollar amount of the checks you will receive each year (adjusted precisely for your specific COLA), and then it shows the value of these annual checks after adjustment for inflation. In other words, you can see what your annual payments will be in today’s dollars, which lets you plan better for the future.

After you calculate the results, you will have the opportunity to download a .pdf that summarizes your inputs and the exact amount of the annual benefit and the exact value of that annual benefit in today’s dollars for each year until you reach age 100.

Unless your pension has an unusually high COLA or you project an unusually low future inflation rate, the buying power of your pension benefits will drop sharply across decades. A 53-year-old who projects a $48,000 per year pension starting at age 65 with no COLA and a 2.99% inflation rate will receive $48,000 in checks at age 65, but those checks will only be worth $33,172 in today’s dollars. At age 75, that $48,000 benefit will only be worth $24,707 in today’s dollars. At age 85, the annual benefit will only be worth $18,402 in today’s dollars.

Present value calculations take into account inflation (through a Treasury interest rate), any COLA you might have, as well as mortality rates.

For a very rough, free, ballpark estimate of the present value of your pension, you can try this present value estimator.

  Disclaimer. Before filling out the form, check this box to indicate that you understand and agree with the disclaimer below.

The information contained within this website is provided for informational purposes only and is not intended to substitute for obtaining professional legal or accounting advice. is not associated with any lawyer, actuary, or accountant, and it does not provide legal or accounting advice. The results provided by this calculator are calculations that depend on assumptions about future inflation rates, cost of living adjustments, and other numbers you enter into this calculator.

5a) My pension has no COLA. (If your pension has an occasional, one-time COLA, you should choose this one.)  Many pensions today have no COLA. If you have a COLA that will only be applied occasionally, then choose 5a), "no COLA".
5b) My pension has a fixed dollar-amount COLA. Many pensions have a COLA that is a fixed dollar amount, i.e., the same, fixed amount each year. Some pensions call this “simple interest” on a specific amount, e.g., 2% of your first annual benefit. Enter the amount of this COLA and indicate how many years and months after retirement the COLA will first be applied. Many pension COLA’s start one year after retirement or on a specific date after a one year waiting period after retirement. Some pension COLA’s have five year waiting periods or waiting periods that depend on your specific age or date of hire.
The first COLA adjustment to my pension will be applied years and months after my retirement date.
5c) My pension has a COLA that is a percentage of the entire benefit. This is for COLA’s that have compounding interest. If your COLA has simple interest, you should choose 5b). If your compounding COLA interest rate varies from year to year, you might find the geometric mean of the COLA's from the last 20-30 years, and use that number. More simply, you might find the arithmetic mean from the last 20-30 years and subtract about 10%. Compounding interest can increase future benefits dramatically, so choosing a high percentage rate can exaggerate the future benefits, and present value, of your pension.
The first COLA adjustment to my pension will be applied years and months after my retirement date.
5d) For some pensions, the cost of living adjustment applies to only part of your entire annual benefit. My pension has a COLA that is a percentage of part of my total benefit amount. Some large pension systems, such as the MA State Employee Retirement System, have COLA percentages that apply to only part of the benefit. In MA, for example, pension benefits receive a 3% COLA but with a maximum benefit of $390 per year. These COLA’s can function like compounding interest COLA’s until a certain threshold is reached and then function like a fixed dollar amount. If one has a MA pension that starts at $10,000 per year, it will receive a compounding COLA of 3% until the annual benefit is greater than or equal to $13,000. After that, it will receive a fixed amount COLA of $390 annually. calculates this correctly when you choose this 5d) COLA option.
The first COLA adjustment to my pension will be applied years and months after my retirement date.
Projected age at retirement:
Inflation rate chosen:
Predicted COLA:

Age Year during which Age starts Partial Year Gross Annual Benefit Including COLA Value of Annual Payment Adjusted for Inflation (Value in Today's Dollars)