Free retirement income tool
Will your Social Security and pension cover what you plan to spend? Enter a few numbers to see your monthly income gap, how inflation grows it, and how long your savings could fill it.
Your results
CheckingYour income gap, year by year (yearly amounts by age)
What this means for you
3 more numbers are in your free report
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“Most people know how much they have saved. Far fewer know how much income it has to create. That number is where a good plan starts.”Roger Fishel, Retirement Planner, Orlando
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Your Income Gap Report (PDF) is on its way to . Your three unlocked numbers are now showing in your results above.
The fastest way to close a gap is a short conversation about your whole picture: Social Security timing, taxes and income that lasts. Every session is free.
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Income gap basics
Short answer: your retirement income gap is what you plan to spend each month minus the guaranteed income you expect, such as Social Security and a pension. Your savings have to cover that difference every month, for the rest of your life.
Most people know how much they have saved. Fewer know how much income those savings have to create. The gap turns a big account balance into a monthly number you can plan around, and it shows how much of your retirement depends on the stock market.
| Social Security (both spouses) | $3,700 a month |
|---|---|
| Planned spending | $5,500 a month |
| Income gap at 65 | $1,800 a month ($21,600 a year) |
| Gap at 85, with 3% inflation | About $3,250 a month |
| Total gap, ages 65 to 92 | About $927,000 |
Hypothetical example for education only, before taxes. Social Security rises with inflation; spending rises 3% a year.
Why it gets bigger
At 3% inflation, prices about double in 24 years. Social Security has a yearly cost-of-living adjustment, but most pensions pay the same amount every year and buy less over time.
Money taken from a traditional 401(k) or IRA is taxed as ordinary income. To spend $1,800, you may need to withdraw more than $2,100, and up to 85% of your Social Security can become taxable too.
When one spouse dies, the smaller Social Security check stops and some pensions shrink. Many costs stay the same, so the surviving spouse can face a bigger gap with fewer years to recover.
Closing the gap
These are only some of the options. The right mix depends on your situation.
Each year you wait past full retirement age, up to 70, can raise your check by about 8 percent for life. For a married couple, the higher earner’s claiming age also sets the survivor benefit.
Try the Social Security Break-Even Calculator →Some retirees use part of their savings for an income annuity or choose a pension option that pays for life, so more of their essential costs are covered every month. Guarantees are backed by the financial strength and claims-paying ability of the issuing insurance company.
How annuities can create income →Which accounts you draw from, and when, can change how much tax you pay and how long your savings last. Roth conversions are taxable in the year of conversion and may not be appropriate for everyone.
Tax-efficient retirement strategies →Retiring a little later, working part time for a few years, or separating essential spending from flexible spending can shrink the gap your savings have to fill.
Working part time in retirement →Every gap is different. A free consultation can look at your Social Security options, your accounts, taxes and a surviving spouse together, and show which of these choices may fit you. Neither the firm nor its agents or representatives may give tax or legal advice.
Book a Free ConsultationFree guide
Learn how retirees turn savings into a paycheck that lasts, and keep more of it away from taxes. Free PDF, written by Roger.
Questions
It is the difference between what you plan to spend each month in retirement and the guaranteed income you expect, such as Social Security and a pension. Your savings have to fill that gap every month, for as long as you live.
Add up the guaranteed income you expect each month: Social Security for you and your spouse, pensions, annuity payments and rental income. Subtract that total from your expected monthly spending, including healthcare and taxes. The difference is your monthly gap. Multiply it by 12 for the yearly amount, and remember that inflation makes it grow over time.
There is no single right number. Many planners like to see essential costs such as housing, food, utilities and healthcare covered by income that does not depend on the stock market, with savings used for travel, gifts and other flexible spending. The right mix depends on your situation.
It depends on the size of your gap, inflation, investment returns and taxes. This calculator shows the age your savings could run out on the numbers you enter. A common rule of thumb is to withdraw about 4 percent of your savings in the first year, but it is only a starting point and does not guarantee your money will last.
Prices rise with inflation, so your spending usually does too. Social Security has a yearly cost-of-living adjustment, but most pensions and many annuities pay the same amount every year, so they buy less over time. A gap of $1,800 a month at 65 can be well over $3,000 a month by your late 80s at 3 percent inflation.
For a married couple, the surviving spouse keeps the larger of the two Social Security checks and the smaller one stops. Some pensions also stop or shrink. Many household costs stay about the same, so the gap can get bigger. Your free report shows how much your monthly income could drop.
The gap is shown before taxes. Withdrawals from a traditional 401(k) or IRA are taxed as ordinary income, so you may need to withdraw more than your gap to have enough to spend. Your free report shows an estimate at an assumed 15 percent tax rate. Neither the firm nor its agents or representatives may give tax or legal advice.
It is a hypothetical estimate for education, not a prediction. It uses the numbers you enter with a steady inflation rate and investment return, before taxes. Real markets go up and down, and your actual results will differ. A free Retirement Clarity Session can look at your own accounts, taxes and Social Security options together.
Keep learning
A free Retirement Clarity Session looks at your income, savings, Social Security and taxes together, in person in Orlando or by video nationwide.
About this calculator: This calculator provides hypothetical estimates for educational purposes only and is not investment, tax or legal advice. Results assume Social Security rises with your chosen inflation rate while pensions and other income stay level, spending rises with inflation, the gap is withdrawn from savings at the start of each year, and the remaining savings earn the steady return you select. Figures are before taxes. Actual returns, inflation, taxes and benefits will vary, and your results will differ.
Neither the firm nor its agents or representatives may give tax or legal advice. Individuals should consult with a qualified tax professional before making any decisions. Annuity guarantees are backed by the financial strength and claims-paying ability of the issuing insurance company.
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