Personal finance
Retirement Gap Calculator
One number matters: the difference between what you will have and what your target income actually requires.
Shortfall at retirement
$1,198,910
- Years to retirement
- 27 years
- Projected savings
- $992,365
- Nest egg needed
- $2,191,275
- Target income, inflation-adjusted
- $87,651 / yr
- Income your projection supports
- $39,695 / yr
- Projection in today's money
- $509,480
- Coverage of target
- 45%
- Monthly contribution required
- $2,186
- Extra needed each month
- $1,486
Closing this gap needs about $1,486 more per month, or a later retirement date, or a smaller income target.
How the projection works
Your existing savings are compounded monthly at the return you set, and your contributions are added as an ordinary annuity. The nest egg target is your desired income inflated to your retirement year, divided by the withdrawal rate — so a 4% rate means twenty-five times your annual spending.
The two assumptions that move the answer most are return and inflation, and neither is knowable. Run the numbers at 4% and at 8% return: if the plan only works at the top end, it is not a plan, it is a hope.
This model ignores tax, state pensions and social security, all of which reduce the private savings you need. Treat the shortfall as an upper bound and check your official pension forecast before making a decision.