Retirement Income Gap Calculator
Enter your income sources and expenses to see if you have a retirement income gap — and exactly how much guaranteed income you'd need to close it.
Your Numbers
Check ssa.gov for your estimate
Existing annuities, rental, etc.
Estimated annual growth until retirement
Income Coverage
68%Monthly Income
$4,588
Monthly Expenses
$6,720
Monthly Gap
-$2,132
Income Breakdown
You have a $2,132/month income gap
That's $25,581 per year your savings must cover. Without a plan, inflation makes this gap worse every year — and if markets drop in your first few years of retirement, the damage compounds.
How an annuity closes this gap
A guaranteed income annuity with approximately $383,721 in premium could generate ~$2,132/month in income you can't outlive — completely closing this gap. Unlike portfolio withdrawals, annuity income doesn't depend on market performance.
Your portfolio is doing the heavy lifting
$2,388/mo comes from portfolio withdrawals vs. $2,200/mo in guaranteed income. That means most of your retirement income depends on market performance. A 30% market drop in year one could force you to sell low and accelerate depletion — this is called "sequence of returns risk."
Delaying Social Security increases your guaranteed floor
Each year you delay past 62 (up to 70) increases your benefit by ~7–8%. If you can bridge the gap with annuity income or savings, delaying creates a permanently higher guaranteed income floor for life.
Save your results — free
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Important Disclosures
- Expenses are inflation-adjusted at 3% per year to retirement age
- Social Security projections include ~2.5% average annual COLA — actual adjustments vary year to year
- Pension and other guaranteed income are not inflation-adjusted unless your plan includes a COLA provision
- Portfolio withdrawal income assumes a constant withdrawal rate — actual withdrawals vary with market conditions
- Annuity premium estimates vary by age — younger buyers need more premium per dollar of income. Actual quotes depend on carrier, product, and current rates
- Consult a licensed financial professional before making decisions
Learn More
Frequently Asked Questions
What is a retirement income gap?
A retirement income gap is the difference between your guaranteed monthly income (Social Security, pensions, annuities) and your projected monthly expenses in retirement. If expenses exceed income, you have a gap that must be covered by portfolio withdrawals or other sources.
How does an annuity close the income gap?
An annuity converts a lump sum into guaranteed monthly income for life. By purchasing an annuity with enough premium to generate the missing monthly amount, you can eliminate your income gap entirely — without relying on market performance.
What withdrawal rate should I use?
The traditional guideline is 4% annually, but this varies based on your age, time horizon, and risk tolerance. A higher rate provides more income but increases the risk of running out of money. This calculator lets you see the impact of different rates.
Is this calculator accurate for my situation?
This calculator provides educational estimates using simplified assumptions. Actual results depend on your complete financial picture, tax situation, and specific product rates. Use it to understand the ballpark, then consult a financial professional for personalized advice.