Retirement planning
Retirement Income Gap Calculator
Compare what you expect to spend each month in retirement against the income you already know about, and see whether there is a gap to plan for.
Your retirement income gap is the difference between what you expect to spend each month and the income you can already count on. If your expenses come to $5,000 a month and Social Security plus a pension cover $3,200, your gap is $1,800 a month, or $21,600 a year. That is the amount your savings have to produce.
It is the first number worth knowing, because almost every other retirement decision depends on it. How much you can safely withdraw, whether waiting to file for Social Security is worth it, which accounts to draw from first, whether any kind of guaranteed income belongs in the plan: all of it starts with the size of the gap.
Most people find a gap. That is normal, and it is not a failing. A gap is what a plan gets built around.
These tools are educational. They are built to help you ask better questions, and they do not replace a personal review with Anthony.
Calculate your monthly income gap
Fill in what you can. Only the first field is required, and nothing you enter is saved or sent anywhere.
Enter your monthly expenses to see a result
Only the first field is required. Everything else is optional, so if you do not have a pension or other income, leave those blank and the calculator will treat them as zero.
If you are not sure what you will spend, start with what you spend now and adjust: commuting and work costs usually fall, healthcare and travel usually rise, and a paid-off mortgage changes the picture more than anything else.
Nothing you type here is saved or sent anywhere. It stays in your browser.
How to get to a realistic expense figure
The expense number does more damage than any other input when it is wrong, and it is usually wrong in the same direction: too low. People estimate what they think they will spend rather than looking at what they do spend.
The most reliable approach is to start with twelve months of your actual spending, then adjust for what genuinely changes.
- Costs that usually fall: commuting, work clothes, lunches out, payroll taxes, and retirement contributions themselves.
- Costs that usually rise: healthcare premiums and out-of-pocket medical, travel and hobbies in the early years, and home maintenance you used to defer.
- The biggest single swing: whether the mortgage is paid off, and when.
- The line people skip: taxes. Money coming out of a traditional IRA or 401(k) is generally taxable income.
- The line nobody wants to think about: long-term care, which is not covered by Medicare in the way most people assume.
What to do with the gap once you know it
A gap is a target, not a problem to be solved with one product. There are several ways to close one, and most real plans use more than one at the same time.
- Change the withdrawal plan: how much comes out, from which accounts, in what order, and how that interacts with your tax bracket.
- Change the timing: filing for Social Security later permanently increases the monthly amount, which shrinks the gap for the rest of your life.
- Change the expenses: a smaller house, one car instead of two, or a different state of residence all move the expense side.
- Add income: part-time work in the early years covers a gap during exactly the period when withdrawals do the most long-term damage.
- Cover part of it with guaranteed income: this is where an annuity sometimes fits, as one component of a plan rather than as the plan. It is a conversation about tradeoffs, not a default answer.
Common questions
- How much income will I need in retirement?
- There is no single percentage that works for everyone. The common rule of thumb is 70 to 80 percent of your pre-retirement income, but rules of thumb are a starting point and not an answer. Your own number depends on whether your mortgage is paid off, what your healthcare costs look like, how much you plan to travel, and whether you are supporting anyone else. Building the figure from your actual expenses is far more reliable than applying a percentage.
- What counts as income I can already count on?
- Income that arrives on a schedule and does not depend on how markets perform: Social Security, a defined-benefit pension, military retirement pay, and rental or part-time income you expect to continue. Withdrawals from savings and investments do not belong in that column, because that money is finite. That is exactly what the gap is measuring.
- Should I include taxes in my expense estimate?
- Ideally yes, and it is the most common thing left out. Withdrawals from a traditional IRA or 401(k) are generally taxable as income, a portion of Social Security can be taxable depending on your total income, and pension income is usually taxable. If your figures are before-tax, the real gap is larger than what this calculator shows. Your tax professional is the right person to size that.
- Does this calculator tell me whether I need an annuity?
- No, and it is not built to. An annuity is one tool that can be used to cover part of an income gap, and there are others: adjusting your withdrawal rate, changing when you file for Social Security, working part-time, or reducing expenses. Which of those fits depends on your whole situation. This calculator sizes the question. It does not recommend a product, and no product is quoted anywhere on this page.
- What is a safe withdrawal rate for covering the gap?
- This is genuinely debated, and any single figure you see quoted is a simplification. The often-cited 4 percent guideline came from historical research on a specific portfolio and a 30-year horizon, and it assumes things that may not hold for your situation. The honest answer is that the sustainable rate depends on your time horizon, your mix of investments, how flexible your spending is, and sequence of returns risk. It is worth working out with someone rather than adopting a number from a headline.
Sources
Where to get the figures this calculator asks for, and independent background on the decisions behind them.
- Social Security Administration: my Social Security account and benefit estimates
The most reliable source for your own Social Security estimate. Use the figure for the age you actually plan to file, not the maximum.
- Social Security Administration: retirement benefit estimator
Shows how filing earlier or later changes your monthly benefit.
- Medicare.gov: your Medicare costs
Current premiums, deductibles, and coinsurance, for the healthcare line of your expense estimate.
- Consumer Financial Protection Bureau: planning for retirement
Independent government guidance on retirement income decisions, including Social Security timing.
Important disclosures
- This tool is provided for general education and planning discussion only. It is not financial, tax, or legal advice, and it is not a recommendation to buy, sell, or keep any product.
- The results depend entirely on the numbers and assumptions you enter. Change an assumption and the answer changes. Nothing here is a projection of what will happen, a quote, or a guarantee.
- No product prices, premiums, interest rates, or payout amounts are quoted anywhere on this page. Any figures specific to a product would come from the issuing company in writing, after a personal review.
- A gap or a surplus shown here is arithmetic on your own figures in today's dollars. It does not account for taxes, inflation, market performance, one-time costs, or long-term care, all of which can change the result substantially.
- An annuity may be one tool among several for covering part of an income gap. This result does not recommend an annuity or any other product, and no rates, payouts, or premiums are shown.
- Anthony D. Morrison is an independent financial professional licensed in Florida. For advice about your own situation, including tax questions, talk with Anthony and with your own tax professional.
The next step is a conversation, not a purchase
A calculator can show you the shape of the question. It cannot tell you which order to draw from your accounts, when to file for Social Security, or what your plan should do about taxes and healthcare. Anthony's retirement questionnaire is how that review starts. There is no cost and no obligation.
Prefer the phone? 407-942-7689
Keep going
Start here. These work through the questions that come before any product conversation: what income you will have, what it has to cover, and how long your savings need to last.