Pension Commutation Calculator
₹
₹5,000₹5,00,000
years
40years70years
%
0%40%
Maximum 40% can be commuted
years
61years100years
Commutation Factor
8.323
Factor at age 60
The commutation factor decreases with age. Higher factor means more lump sum for the same commuted pension.
For government employees, commuted portion of pension is restored after 15 years. The lump sum received on commutation is tax-free.
Lump Sum Amount
₹19,97,520
Tax-free amount received
Reduced Monthly Pension
₹30,000
For 15 years
No Commutation is Better
By ₹16,02,480 over your lifetime
Lifetime Comparison
Growth Over Time
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Detailed Analysis
Basic Monthly Pension₹50,000
Commutation (40%)₹20,000/month
Lump Sum Received₹19,97,520
Reduced Pension (15 years)₹30,000/month
Restored Pension (after 15 years)₹50,000/month
Break-even Period8.3 years
Total with Commutation₹1,03,97,520
Total without Commutation₹1,20,00,000
Decision Factors
Choose Commutation If:
- You need immediate lump sum for investment/expenses
- You can invest the lump sum at returns > 7-8%
- You have health concerns about longevity
Avoid Commutation If:
- You expect to live well beyond 75+ years
- You prefer guaranteed monthly income
- You don't have urgent need for lump sum