Rule of 88 Calculator

Formula

The formula to calculate the pension amount under the Rule of 88 is:

\[ \text{R88} = \frac{\text{A} \times \text{S}}{88} \]

Where:

$\text{R88}$ is the Pension Amount under Rule of 88 ($)
$\text{A}$ is the Average Salary over the Last 5 Years of Employment ($)
$\text{S}$ is the Total Years of Service

What is the Rule of 88?

The Rule of 88 is a retirement policy guideline used by some companies to determine when an employee is eligible for full retirement benefits. According to this rule, an employee can retire with full benefits when their age plus their years of service with the company equals 88. For example, if an employee is 60 years old and has worked for the company for 28 years, they would meet the Rule of 88 and be eligible for full retirement benefits.

Example Calculation

Let's consider an example:

Average Salary over Last 5 Years (A): $50,000
Total Years of Service (S): 30 years

Using the formula to calculate the pension amount under the Rule of 88:

\[ \text{R88} = \frac{50,000 \times 30}{88} \approx 17,045.45 \text{ dollars} \]

This means that the Pension Amount under Rule of 88 (R88) is approximately $17,045.45.