# Free Present Value Pension Estimator (Life Expectancy Method)

This free present value pension estimator uses the “life expectancy” method with GATT-method discounting to calculate the present value of future pension payments that end on your life expectancy date. It can be used for very rough, ballpark approximations of pension present value.

The life expectancy method is an inherently inaccurate way to calculate the present value of a pension because it does not take into account the chance that you might live shorter or longer than your exact life expectancy. For an accurate present value, you must use an actuarial calculator, which makes many thousands of calculations.

In the examples of calculations given by Altschuler and Kelley in Value of Pensions in Divorce, the “life expectancy” method of calculation gives present values that range from about 20% too high to 20% too low. Thus, if the true present value of your pension is \$500,000 (as computed with actuarial calculations), a life expectancy present calculator might give you a number such as \$400,000 or \$600,000. Unfortunately, you won’t know if the life-expectancy present value is mistakenly high or mistakenly low. In other words, if the life expectancy calculator gives a present value of \$600,000, for example, the true present value could be over \$700,000 or under \$500,000, and you won’t know which is the case.

This free calculator includes sophisticated calculations of COLA’s (cost-of-living-adjustments) based on the information you enter under Question #6, below.

It uses the 30-year Treasury Rate (GATT method) for discounting. As of early 2020, historically low 30-year Treasury rates result in relatively high present values. The present value estimator on this page will produce higher present values than if the calculations were run using IRC Segment interest rates or PBGC deferred and immediate interest rates.

You may also be interested in seeing how inflation and any COLA you might have will affect the purchasing power of your pension benefits with the free inflation COLA pension calculator. This calculator shows you the annual face value of your pension benefits (taking into account any COLA) until age 100 and then shows you the value of each of those annual amounts in TODAY’S dollars (i.e., taking inflation into account).

The calculator does not work with Internet Explorer. Please use a different browser.

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

The calculator on this page does NOT provide actuarial calculations. It provides ballpark approximations of present value using the life expectancy method of calculation. 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. ValueYourPension.com is not associated with any lawyer, actuary, or accountant, and it does not provide legal or accounting advice.

6a) My pension has no COLA. (If your pension has an occasional, one-time COLA, you should choose this one.)
6b) My pension has a fixed dollar-amount COLA.
The first COLA adjustment to my pension will be applied years and months after my retirement date.
6c) My pension has a COLA that is a percentage of the entire benefit.
The first COLA adjustment to my pension will be applied years and months after my retirement date.
6d) For some pensions, the cost of living adjustment applies to only part of your entire annual benefit. My pension has a COLA that is apercentage of PART of my total benefit amount.
The first COLA adjustment to my pension will be applied years and months after my retirement date.

Please report any bugs to me and please pass along suggestions on how to make it more comprehensive or user-friendly: [email protected]

To make changes, simply scroll up and make changes, then press "Calculate now" again.
Present value:
Calculated life expectancy based on 2014 Social Security Period Life: