Why put a lump-sum value on a pension?
A FERS pension pays monthly, for life — that's exactly what makes it hard to weigh against a single number like a signing bonus, a 401(k) balance, or a private-sector salary offer. Present value solves that by discounting every future pension check back to today, producing one figure you can compare directly against other lump-sum options.
It is also a useful gut check when you're evaluating whether to leave federal service: a six-figure present value is real compensation you'd be walking away from, even though no single paycheck shows it.
How this calculator works
We project your monthly pension at your planned retirement age using the standard OPM FERS formula, then discount every year of payments from that age through age 85 back to today, at a fixed 3% real discount rate — an approximation of the TSP G Fund's long-run real return. Because FERS COLA is designed to preserve purchasing power, a real (inflation-adjusted) rate is the correct lens rather than a nominal one.
This is a simplified, disclosed estimate — not an actuarial valuation. It doesn't model your individual life expectancy, and it isolates the pension itself (no TSP, Social Security, or FERS Supplement).
See the full picture
Your pension is one piece of retirement income alongside TSP, Social Security, and the FERS Supplement. The FedHorizon Timeline puts all of them together across multiple retirement ages.
Your pension's present value is one input. Your full report combines pension, supplement, survivor election, and FEHB into one decision.
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