Want to know your pension income? A new calculator provides an estimate

A new online calculator to estimate an individual’s potential pension amount was launched on Monday. 

The RetireSmart calculator is a free online tool designed to help people calculate what they stand to earn in pension income once they retire - and how much more they will need to finance their lifestyle. 

Launched by the Social Policy Ministry, the calculator guides users through a step-by-step process to understand what they earn, how long they've been working and what that means for their pension income.

The calculator appears to be a state-sponsored nudge for people to enrol in a private pension or find other ways of supplementing their income in retirement: even the most frugal pension lifestyle option presented (€20,000 a year) is higher than the maximum pension a person can earn. 

How the calculator works 

The user inputs basic information, such as age, employment status and contribution history. The calculator asks for details such as the age at which the user started their first job and their current salary, excluding bonuses and allowances.

The user will input basic information, such as age, employment status and contribution history. Photo: RetireSmart calculator

Users can also indicate whether they have had any employment gaps, such as time away from work to raise children, periods of unemployment, studying or caring for a relative.

In the case of raising children, the calculator will ask for details, including how many children the user has had, their age, if they have any disabilities and how much time they took off to raise their children. Users can select more than one option.

Users can select if they had any employment gaps, to further their studies or to care for a relative. Photo: RetireSmart calculator

The user must then pick a “desired retirement lifestyle”, indicating how much they expect to spend each year in retirement. Users must choose anything between €20,000 and €30,000 - no higher or lower amounts are permitted.  

Based on the information provided, the calculator gives a snapshot of a user’s potential retirement outlook and how much extra would be needed to achieve the desired retirement lifestyle.

The tool shows how different life circumstances, such as career breaks, having children or changes in employment status, can influence retirement outcomes. This will allow users to explore the financial consequences of different scenarios.

The calculator does not take into consideration any social benefits or whether the user has more than one form of employment.

The calculator does not store any personal data.

The state pension aims to reflect two-thirds of your final salary. The maximum state pension an individual can receive depends on different factors, such as when a person is born, their employment history and past contributions. In 2026, the typical pension payment hovers around the €18,000 mark. 

Examples:

A 31-year-old started working at 18 and currently earns €25,000 per year. She had a three-year employment gap to complete a bachelor's degree.

She would like to have retirement income of €25,000 a year.

According to the calculator, she will receive a state pension of €16,666 and will  need an extra €8,333 per year to achieve her desired retirement lifestyle. 

The calculator provides an estimated snapshot of a user's potential retirement outlook. Photo: RetireSmart Calculator

A 40-year-old started his first job at 23 and currently earns €40,000. He took two years off to raise a child who is now 17. His ideal retirement lifestyle would be spending €25,000 per year. 

According to the calculator, he will receive a state pension of €19,388 and will need an extra €5,611 per year to achieve his desired retirement lifestyle.

‘Plan ahead’

Speaking during the launch, Social Policy Minister Michael Falzon said the calculator is an ideal tool for younger workers who may not have given their retirement any thought. 

“When we talk about pensions, we tend to push that discussion for ‘later’, but ideally, we plan these big decisions,” Falzon said.

The pension calculator is not a new tool, as there is already the official Security Department (DSS) calculator, along with calculators by private firms such as HSBC and Mapfre MSV Life.

Social Policy Minister Michael Falzon during Monday's launch of the Retire Smart calculator. Photo: Jonathan Borg

‘Credibility with pensioners’

The topic of pensions made headlines in recent weeks, after the government announced changes aimed at increasing tax exemptions for pensioners. 

According to a government statement earlier this month, new rules increase the tax-exempt threshold on pension income to €37,000 as part of a broader reform that will see pensions fully exempt from tax by 2026.

A Times of Malta fact-check concluded that the measure only applies to pension income, not to other income sources such as employment, investment, or rental earnings. 

When asked if the government would amend the measure to apply to pensioners' other income sources, Falzon said the government has proven its credibility with pensioners over the past 11 years, including consecutive rises in pensions. 

He said those who are criticising the measure are the same party that “froze pensions for 25 years”, referring to how the previous PN administration failed to increase the pension amount.

“What I can assure you is that we will continue to improve the livelihood of pensioners,” the minister added.

Falzon added that currently, only one out of 12 pensions pays the smallest amount of tax, compared to 2015, when it was one out of three.