Retirement Savings Gap Calculator

Finding Your Retirement Gap

Most people don't know their retirement gap — the difference between their projected savings balance and the amount they'll actually need to fund their desired retirement lifestyle. Knowing this gap is the first step to closing it.

The 4% Withdrawal Rate Rule

At a 4% annual withdrawal rate, you need 25x your desired annual retirement income saved. If you want 50,000/year in retirement, you need 1.25 million. This calculator shows how close you are to that target.

What People Often Overlook

One thing many people forget is that small monthly contributions can make a surprising difference over time — especially with compound growth working in the background. It can help to think of it less as a lump sum problem and more as a long-term habit. Many people find that even modest increases to their monthly contributions, made earlier rather than later, can meaningfully narrow the gap. This is worth noting when you look at your results.

How to Use Your Results

The numbers this calculator produces are illustrations, not predictions. Markets fluctuate, circumstances change, and retirement looks different for everyone. One approach is to run a few different scenarios — adjusting your contribution or return assumptions slightly — to get a feel for the range of possibilities. Seeing that range can be genuinely useful when thinking through your next steps.

Quick example

With current retirement savings of 50,000 and monthly contribution of 500 (plus years to retirement of 25 and expected annual return of 7), the result is 14,308,693.24. Change any figure and watch the output shift — it's often more useful to see the pattern than to memorise the formula.

Which inputs matter most

You enter Current Retirement Savings, Monthly Contribution, Years to Retirement, Expected Annual Return, and Desired Retirement Income/yr. The rate and the time horizon usually dominate — compounding means a small change in either reshapes the final figure more than a similar shift in contribution size. Test this by doubling one input at a time.

What's happening under the hood

This calculator projects the retirement savings by applying compound interest to current savings and regular contributions over time, then subtracts this from estimated annual retirement expenses multiplied by the retirement duration. Results assume a constant annual return rate, consistent contributions, and annual compounding. Outputs are illustrations only, not guarantees. The formula is listed in full below. If the number looks off, you can retrace the calculation by hand — that's the point of showing the working.

How to use this beyond the first run

Re-run the calculation once a year. Life changes — pay rises, new expenses, interest-rate shifts — and the figure that looked right 12 months ago often isn't today. Annual recalibration keeps the plan honest.

What this doesn't capture

The calculation assumes a steady savings rate and a stable interest rate. Real saving journeys include emergencies, windfalls, and rate changes — especially in easy-access products. The figure is a direction of travel, not a guarantee.