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Retirement Gap Calculator

The Retirement Gap Calculator estimates the difference between the retirement savings you are projected to have and the amount needed to support a chosen annual income. It combines current savings, future contributions, investment growth, retirement duration, and expected nonportfolio income into one funding comparison.

The output is useful for testing whether a savings plan is broadly on track and for seeing how changes to contributions, retirement timing, or spending assumptions affect the shortfall. Because future returns and inflation are uncertain, the result should be reviewed as a scenario rather than a promise.

Calculator inputs

USD
USD
years
%
USD
USD
years
%
Result
—
Calculated result
Projected savings—
Target portfolio—
Funding gap—
Additional monthly saving—

1. Enter current savings
Include retirement accounts and other assets earmarked for retirement.

2. Add annual contributions
Use the total amount expected to be invested each year.

3. Set time and return
Choose years until retirement and a planning return assumption.

4. Define retirement income
Enter desired annual spending and income expected from pensions, benefits, or annuities.

5. Choose a withdrawal rate
Use a rate consistent with the planning approach you want to test.

6. Review gap and added saving
The calculator shows both the portfolio difference and an estimated extra monthly contribution.

Projected savings = Current savings × (1 + r)^n + Annual contribution × [((1 + r)^n − 1) ÷ r]
Target portfolio = (Desired annual income − Other annual income) ÷ Withdrawal rate
Retirement gap = Target portfolio − Projected savings

Contributions are modeled at year-end and returns are constant. The retirement-years input provides context but the target is primarily based on the selected withdrawal rate.

What the result means

A positive gap indicates an estimated shortfall; a negative gap indicates projected assets above the target under the selected assumptions.

Investment returns, inflation, taxes, fees, and benefit rules can materially change actual retirement outcomes.

Given: $180,000 saved, $18,000 annual contributions, 20 years, 6% return, $60,000 desired income, $24,000 other income, and a 4% withdrawal rate.

Calculation: Projected savings = $180,000 × 1.06²⁰ + $18,000 × ((1.06²⁰ − 1) ÷ 0.06) = about $1,192,713. Target portfolio = ($60,000 − $24,000) ÷ 0.04 = $900,000.

Result: Projected assets exceed the target by about $292,713.

Why is the withdrawal rate important?

It converts the annual income the portfolio must provide into a target asset amount. A lower rate generally produces a larger target.

Should desired income be entered in today’s dollars?

Use a consistent basis. If the income target is in today’s dollars, use an inflation-adjusted return rather than a nominal return.

What belongs in other retirement income?

Include recurring income not drawn from the modeled portfolio, such as a pension or expected government benefit.

What if the result shows a surplus?

A surplus means the projection exceeds the selected target, not that retirement is guaranteed. Stress-test lower returns or higher spending.

Does this replace a retirement plan?

No. It is a scenario calculator and does not account for taxes, account rules, sequence-of-returns risk, or personal longevity needs.