Free tool
Retirement income gap calculator
The most useful number in retirement planning is the difference between what you must spend each month and what arrives guaranteed. Everything else is a decision about how to fill it.
Essential expenses against guaranteed income
Enter monthly figures. Essentials are what you would still have to pay in a bad year — travel and hobbies sit above the floor and belong in the discretionary box.
What this tool cannot do
- It does not adjust for inflation over a multi-decade retirement
- It uses today’s expenses; healthcare costs typically rise faster than general inflation
- It does not model taxes on withdrawals, which reduce what a portfolio actually delivers
- It does not account for long-term care costs, which sit outside a normal monthly budget
- It sizes a gap; it does not recommend a product, and often no product is needed
Calculators are for orientation. Before you act on a number, have a licensed person check it against your actual situation — that part is free.
Questions about this tool
What counts as an essential expense?
Anything you would still have to pay in a bad year: housing costs, utilities, food, insurance premiums, property and income taxes, transport and out-of-pocket healthcare. Travel, gifts and hobbies sit above the floor — desirable, but discretionary.
Does a gap mean I need an annuity?
No. It means you have a gap that something has to fill, and a portfolio can fill it perfectly well for many households. Guaranteed income products are worth considering when the gap is large relative to the portfolio, or when the certainty itself is what you want to buy.
How does this relate to sequence-of-returns risk?
A gap covered entirely by portfolio withdrawals is exposed to the order in which returns arrive, particularly in the first decade. Covering the essential portion with guaranteed income removes the need to sell into a falling market to pay for groceries.