Find your retirement shortfall or surplus. Enter age, target income, savings, contributions, return and inflation—get required nest egg, projected savings, gap, and monthly savings to close the gap.
Retirement Gap Calculator
Find your retirement shortfall or surplus. Enter current age, retirement age, target income, savings, contributions, and return/inflation. Get required nest egg, projected savings at retirement, gap, and monthly savings needed to close the gap.
Understanding the Inputs
What each parameter means for the retirement gap
Age & Target Income
Current age, retirement age, and life expectancy set the horizon. Target annual income is how much you want to spend each year in today's dollars; it is inflated to retirement.
Years to retirement = retirement age − current age.
Years in retirement = life expectancy − retirement age.
Savings, Contributions & Returns
Current savings and annual contribution are grown at the expected return until retirement. Inflation is used to convert target income to retirement-year dollars and to compute real returns for the nest egg.
Required nest egg = PV of an annuity paying target income (in retirement dollars) for years in retirement at real return.
Gap = Required nest egg − Projected savings at retirement.
Formula Used
Target income at retirement = Target today × (1 + inflation)^(years to retirement). Required nest egg = Target income at retirement × (1 − (1 + real rate)^(−years in retirement)) / real rate. Projected savings = Current savings × (1 + nominal return)^(years to retirement) + Annual contribution × ((1 + nominal return)^(years to retirement) − 1) / nominal return. Gap = Required − Projected. Monthly savings to close gap = PMT so that FV of contributions + FV of current savings = required nest egg.
The required nest egg is the present value (at retirement) of a level real annuity: you need enough to pay yourself the target income (in year-1 retirement dollars) each year for the rest of your life, discounted at the real rate of return.
The retirement gap is the difference between the amount of savings you need at retirement (the required nest egg) and the amount you are on track to have (projected savings at retirement). A positive gap is a shortfall: you need to save more, retire later, or plan to spend less. A negative gap is a surplus: you may be able to retire earlier or spend more.
Why It Matters
Knowing your gap helps you set a concrete savings target and adjust contributions or retirement age. Without it, you may save too little and run short in retirement, or save more than needed and sacrifice current lifestyle unnecessarily.
How the Calculator Works
You enter current age, retirement age, life expectancy, target annual income in today's dollars, current savings, annual contribution, expected investment return, and inflation. The calculator inflates your target income to the first year of retirement, computes the present value of that annuity over your years in retirement (using the real rate of return), and compares that required nest egg to the future value of your current savings plus contributions. The difference is the gap. If there is a shortfall, it estimates the additional monthly savings needed to close it.
Real vs Nominal
Required nest egg is in "year-1 retirement dollars"—the amount you need at the day you retire to fund a stream of payments that keep pace with inflation. Projected savings are in nominal dollars at retirement. The comparison is consistent because both are in the same (retirement-date) dollar terms.
If you enter Social Security or pension income, subtract it from your target annual income so the calculator only solves for the gap that must be funded from savings.
Required Nest Egg
The required nest egg is the present value of an annuity that pays your target income (in the first year of retirement) for each year of retirement. The discount rate is the real return: (1 + nominal return) / (1 + inflation) − 1. So you need enough money at retirement so that, if you earn the real return each year, you can withdraw the target amount (in real terms) every year for the rest of your life.
This assumes you spend the same real amount each year; in practice, many people spend more early in retirement (travel, hobbies) and less later. You can add a buffer to your target income to reflect that.
Impact of Assumptions
Higher expected return lowers the required nest egg (future dollars are discounted more). Higher inflation raises the target income at retirement and can raise or lower the required nest egg depending on how it affects the real rate. Longer life expectancy increases the required nest egg; earlier retirement does too.
Use a real return of roughly 3–5% (e.g. 6% nominal and 2–3% inflation) for a balanced assumption; being too optimistic on return can lead to under-saving.
Closing the Gap
If you have a shortfall, you can close it by saving more (increase monthly or annual contribution), retiring later (more years of contributions and growth), lowering your target income in retirement, or assuming a higher return (use with caution). The calculator's "monthly savings to close gap" is the additional amount to save each month, from now until retirement, so that the future value of those savings (plus your current savings and existing contributions) equals the required nest egg.
Increasing Savings Over Time
If you cannot save the full "monthly to close gap" today, plan to increase savings with raises or bonuses. Alternatively, retire one or two years later to reduce the shortfall; the calculator lets you test different retirement ages to find a feasible plan.
Limitations
The model assumes level real spending; many people spend more early in retirement. It does not include Social Security, pensions, or other income—subtract those from your target income for a more accurate gap. Returns and inflation are uncertain; use conservative assumptions. Life expectancy is unknown; planning to 90 or 95 reduces longevity risk but increases the required amount. The monthly savings to close the gap are in nominal terms; in practice, increase savings with inflation each year to maintain real effort.
Conclusion
The retirement gap calculator gives you a clear target and a concrete action (e.g. save $X per month) to close a shortfall. Review your gap periodically as your savings, contributions, and assumptions change, and adjust your plan accordingly.
Use the calculator with different retirement ages and target incomes to test "what if" scenarios: retiring earlier, spending more in retirement, or reducing target income to see how the gap and required monthly savings change. Updating your gap annually keeps your plan aligned with reality.
Combine this tool with a retirement savings calculator and Social Security estimates for a complete picture of your retirement readiness.
Frequently Asked Questions
Common questions about the retirement gap
What is the retirement gap?
The retirement gap is the difference between the nest egg you need at retirement (to fund your desired income for life) and the amount you are on track to have based on current savings and contributions.
How is the required nest egg calculated?
Your target annual income is inflated to the first year of retirement. The required nest egg is the present value of an annuity that pays that amount each year for your years in retirement, discounted at the real rate of return.
What is the real rate of return?
Real return = (1 + nominal return) / (1 + inflation) − 1. It is the return after inflation, used to value a stream of real (inflation-adjusted) income.
Should I include Social Security?
Yes. Reduce your target annual income by your expected Social Security (and any pension) so the gap reflects only what you need from savings.
What if I have a surplus?
A surplus means you are on track to have more than needed. You might retire earlier, spend more in retirement, or leave a larger legacy. Re-run with a higher target income or earlier retirement to test.
Why is "monthly savings to close gap" sometimes blank?
It is shown only when there is a shortfall and there are years left until retirement. If you are on track (surplus), no additional savings are needed.
Are the results guaranteed?
No. Returns and inflation are uncertain. Use conservative return and inflation assumptions and revisit your gap regularly.
How do I use the monthly savings number?
It is the additional amount to save each month (in addition to your current annual contribution) so that your total projected savings at retirement equals the required nest egg. Increase this amount with inflation each year for a constant real savings effort.
What life expectancy should I use?
Planning to 90 or 95 reduces the risk of outliving your savings. Use family history and health as a guide; when in doubt, use a longer horizon.
Can I retire earlier if I have a surplus?
Yes. Re-run the calculator with an earlier retirement age. If you still have a surplus, you may be able to retire then. If you get a shortfall, you will see how much more you need to save to retire at that age.
How often should I recalculate my gap?
At least annually, or when your income, savings, or goals change. Market returns and contribution changes will shift your projected savings; updating assumptions keeps your plan realistic.
Usage of this Calculator
Who should use it and when
Who Should Use This Calculator?
Mid-career saversTo see if you are on track and how much to save each month to close a shortfall.
Pre-retireesTo check whether you can retire at your target age or need to work longer or save more.
Financial advisorsTo show clients their gap and the impact of saving more or retiring later.
Anyone planning retirementTo turn a vague goal into a concrete nest egg and monthly savings target.
Limitations & Accuracy
Assumes level real spending; actual spending may vary. Does not include Social Security or pensions—reduce target income by those amounts.
Returns and inflation are uncertain; use conservative assumptions and revisit regularly.
Monthly savings to close gap are nominal; increase with inflation each year for constant real effort.
Life expectancy is uncertain; use 90 or 95 to reduce longevity risk.
Real-World Examples
On track
Age 45, retire at 67, $80k target income, $200k savings, $12k/year contribution, 6% return, 2.5% inflation: projected savings can exceed required nest egg, giving a surplus and no need to increase savings.
Shortfall
Same profile but $20k target and only $3k/year contribution: large shortfall. The calculator shows the additional monthly savings needed to close the gap; increasing contribution or retiring later can eliminate it.
Sensitivity to return and inflation
Try 5% vs 7% return and 2% vs 3% inflation; the required nest egg and monthly savings to close the gap can change noticeably. Use a range of assumptions to stress-test your plan.
Summary
The Retirement Gap Calculator estimates the nest egg you need at retirement based on your target income and life expectancy, compares it to your projected savings (current savings + contributions grown at your expected return), and reports the gap. If you have a shortfall, it estimates the additional monthly savings needed to close it.
Use it to set a concrete savings target and to adjust contributions or retirement age. Revisit as your situation and assumptions change.
Remember to subtract Social Security and pensions from your target income for a more accurate gap from savings alone. Re-run with different retirement ages and returns to stress-test your plan.
Required nest egg and monthly savings are estimates; actual returns and inflation will differ. Use conservative return and inflation assumptions.
Review your gap at least annually and after major life or market changes. Combine with Social Security and pension estimates for a full picture.
If you have a shortfall, increasing monthly savings or retiring later are the main levers to close it.
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Find your retirement shortfall or surplus. Enter age, target income, savings, contributions, return and inflation—get required nest egg, projected savings, gap, and monthly savings to close the gap.
How to use Retirement Gap Calculator
Step-by-step guide to using the Retirement Gap Calculator:
Enter your values. Input the required values in the calculator form
Calculate. The calculator will automatically compute and display your results
Review results. Review the calculated results and any additional information provided
Frequently asked questions
How do I use the Retirement Gap Calculator?
Simply enter your values in the input fields and the calculator will automatically compute the results. The Retirement Gap Calculator is designed to be user-friendly and provide instant calculations.
Is the Retirement Gap Calculator free to use?
Yes, the Retirement Gap Calculator is completely free to use. No registration or payment is required.
Can I use this calculator on mobile devices?
Yes, the Retirement Gap Calculator is fully responsive and works perfectly on mobile phones, tablets, and desktop computers.
Are the results from Retirement Gap Calculator accurate?
Yes, our calculators use standard formulas and are regularly tested for accuracy. However, results should be used for informational purposes and not as a substitute for professional advice.