Practical guide
Understanding retirement income gap — two-scenario comparison
Everyday editorial team · GEOINNOVATION CO., LTD · Published · Updated
What this calculation is for
A retirement-income gap compares a desired spending amount with other income and an illustrative portfolio draw. It makes an unfunded goal visible without assuming that an income target automatically changes the savings projection.
How the method works
Savings grow from the entered balance and deposits until retirement. A withdrawal assumption converts the projected fund to monthly income, which is combined with entered benefits and compared with the target. The displayed model uses: Project savings and estimated monthly withdrawal income; compare with target after entered other income.
A worked example
For an illustrative retirement income gap scenario, use Desired monthly retirement income: 6500 $; Other monthly retirement income: 2200 $; Current retirement savings: 400000 $; Years until retirement: 15 years; Monthly savings until retirement: 800 $; Assumed annual return: 5 %; Initial withdrawal rate: 4 %. The modeled estimated monthly retirement income is $5,678.1. These are example assumptions, not current prices, official benefit amounts or personalized advice.
Assumptions and real-world differences
Benefit estimates, taxation, inflation and a sustainable withdrawal policy require separate review. The result is not a Social Security benefit calculation or a probability that the plan will succeed. Social Security or pension amounts are user estimates; taxes and benefit eligibility are excluded.
Building two independent scenarios
Scenario A and Scenario B each have a complete set of inputs for this retirement income gap calculation. Change several inputs in B when comparing genuinely different plans, then inspect the B-minus-A headline difference and the detailed rows. When multiple inputs change, the total difference cannot be attributed to just one of them.
Reproduce this tool’s example
These fixed example inputs are independent of edits you make above. Enter them in this tool to reproduce the result, then replace them with your own assumptions.
- Scenario A — Desired monthly retirement income
- 6,500 $
- Scenario A — Other monthly retirement income
- 2,200 $
- Scenario A — Current retirement savings
- 400,000 $
- Scenario A — Years until retirement
- 15 years
- Scenario A — Monthly savings until retirement
- 800 $
- Scenario A — Assumed annual return
- 5 %
- Scenario A — Initial withdrawal rate
- 4 %
- Scenario B — Desired monthly retirement income
- 6,500 $
- Scenario B — Other monthly retirement income
- 2,750 $
- Scenario B — Current retirement savings
- 400,000 $
- Scenario B — Years until retirement
- 15 years
- Scenario B — Monthly savings until retirement
- 800 $
- Scenario B — Assumed annual return
- 5 %
- Scenario B — Initial withdrawal rate
- 4 %
Scenario B result: $6,228.1
Scenario A: $5,678.1. Estimated monthly retirement income.
- Scenario A main result: $5,678.1
- Scenario B main result: $6,228.1
- Numeric difference (B − A), in result units: 550
Frequently asked questions
- Should benefits and the target use the same dollar basis?
- Yes. Avoid comparing a today’s-dollar spending target with unadjusted future-dollar benefits or balances.
- Which inputs should I check before using this retirement income gap estimate?
- Check desired monthly retirement income, other monthly retirement income, current retirement savings, years until retirement, monthly savings until retirement, assumed annual return, initial withdrawal rate. Match each field’s unit and time period, then compare the detailed rows rather than treating the headline alone as the complete answer.
- Why is this different from the one-factor comparison?
- The one-factor tool changes only other monthly retirement income. This version lets all model inputs differ, so it is more flexible but does not isolate the effect of any single change.