Home
Back
Retirement Income Gap Formula:
| From: | To: |
The Retirement Income Gap represents the difference between the income you'll need during retirement and the income you expect to receive from various sources. For married couples, this calculation considers combined financial needs and resources.
The calculator uses the simple formula:
Where:
Explanation: The calculation helps married couples identify potential shortfalls in retirement income and plan accordingly to bridge the gap.
Details: Calculating the retirement income gap is crucial for financial planning, ensuring that married couples can maintain their desired lifestyle throughout retirement without facing financial hardship.
Tips: Enter your required annual retirement income and expected annual retirement income in your local currency. Both values must be positive numbers.
Q1: What should be included in required income?
A: Include all anticipated expenses: housing, healthcare, food, transportation, leisure activities, and any other regular expenses you expect during retirement.
Q2: What sources contribute to expected income?
A: Include pensions, Social Security benefits, retirement account distributions, investment income, rental income, and any other reliable income sources.
Q3: How often should we recalculate our retirement gap?
A: It's recommended to review and recalculate annually or whenever there are significant changes in your financial situation or retirement plans.
Q4: What if our gap is negative?
A: A negative gap indicates your expected income exceeds your required income, which is an ideal situation. A positive gap means you need to find additional income sources or reduce expenses.
Q5: Should we consider inflation in our calculations?
A: Yes, it's important to factor in inflation when projecting both required and expected income, especially for long-term retirement planning.