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Salary Inflation Calculator
COLA & Adjustments

Pension COLA Scenario Calculator

Compare pension adjustment assumptions.

Pension COLA Scenario Calculator: Scenario Inputs

Live Model
$
%

Annual percentage rate or benchmark index change.

3y
%
Computed Results

Inflation & Purchasing Power Analysis

Real Adjusted Value
$67,645
Effective base purchasing power
Purchasing Power Loss
-$7,355
-9.81% cumulative loss
Target Inflation Break-Even
$83,154
Salary needed to keep pace
Net Real Wage Growth
-1.45%/yr
Nominal raise vs price index

Over 3 years at 3.5% inflation, a $75,000 salary requires $83,154 to retain equal purchasing power. Without matching raises, your real compensation experiences an effective reduction of $7,355 (-9.81%).

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Main Calculator

How Pension COLA Scenario Calculator Works?

The Pension COLA Scenario Calculator projects a pension under each adjustment rule. All scenarios use the same inflation path, which keeps the comparison fair.

  1. Enter the pension

    Type the yearly pension paid in the first year of retirement.

  2. Pick COLA rules

    Choose full CPI, fixed rate, capped CPI, partial CPI or none.

  3. Set inflation and years

    Type the inflation assumption and retirement length.

  4. Compare scenarios

    The output shows real pension in key years and total real payments.

Pension COLA Scenario Calculator Formula

The Pension COLA Scenario formula grows the pension by each rule's COLA and divides by cumulative inflation.

Real pension in year t

Realt = Pension × Π (1 + COLAk) ÷ Π (1 + πk)

Total real payments

Total = Σt Realt

Variables

COLAk
Adjustment under the chosen rule in year k
πk
Inflation in year k

Worked example

A $36,000 pension at 3.5% inflation keeps its full real value under a CPI COLA. After 25 years, a 50%-of-CPI rule leaves $23,505 of real value, and no COLA leaves $15,233.

Pension COLA Scenario Calculator Conversion Table

This table compares 5 COLA rules for a $36,000 pension at 3.5% yearly inflation.

COLA ruleReal pension, year 10Real pension, year 25Total real payments over 25 years
Full CPI COLA$36,000$36,000$900,000
Fixed 2% COLA$31,110$24,992$759,564
CPI capped at 2.5%$32,669$28,242$802,987
50% of CPI$30,356$23,505$739,009
No COLA$25,521$15,233$614,101

What is Pension COLA Scenario Calculator?

The Pension COLA Scenario Calculator is a tool that compares several pension cost-of-living adjustment (COLA) rules over a full retirement and reports real income and total real payments for each. The calculator shows the long-run value of each rule in one table.

Over a 25-year retirement at 3.5% inflation, the difference between a full CPI COLA and no COLA exceeds half of the pension's real value by the final year.

What are the uses of Pension COLA Scenario Calculator?

There are 4 main uses of the Pension COLA Scenario Calculator.

  • Compare plan offers

    Compare pension plans with different COLA rules.

  • Assess reform proposals

    Measure the effect of COLA reforms on retirees.

  • Plan retirement savings

    Size savings to fill the gap under weaker COLA rules.

  • Brief plan members

    Explain COLA options with real-dollar results.

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