We convert the monthly pension into a single value today (its present value) so it can be compared apples-to-apples with the lump-sum offer.

Step by step

1. We treat the monthly pension as an annuity paid over the years you expect to collect.
2. We discount those payments to today using an assumed discount rate, giving the pension's present value.
3. We compare that present value with the lump-sum offer.

The math

pensionPV = monthly×12 × [1 − (1+d)^−years] ÷ d, where d is the annual discount rate.

Sources & assumptions

• Standard present-value-of-an-annuity formula (public domain); the discount rate is a shown, configurable assumption.

Note: Nothing proprietary. A simplified model — it omits cost-of-living adjustments, taxes, and survivor benefits.

1. This is an educational comparison using a discount-rate assumption shown with your results; it ignores taxes, COLA, and survivor options.