Identify the gap between your retirement expenses and guaranteed income sources
The Income Gap Calculator helps identify the shortfall between your essential retirement expenses and your guaranteed income sources, such as Social Security or pensions. By clearly showing what’s covered—and what’s not—it highlights how much additional, reliable income may be needed to maintain your lifestyle throughout retirement. This creates a clear starting point for building a more secure and predictable retirement income strategy.
Your Information
Understanding Your Income Gap
What is an Income Gap?
The income gap is the difference between your retirement expenses and your guaranteed income sources (Social Security, pensions, annuities). This gap must be filled by withdrawals from your investment portfolio.
Why It Matters
Understanding your income gap helps determine how much you need saved and what withdrawal rate is sustainable. A larger gap means more reliance on portfolio withdrawals, increasing exposure to market volatility and sequence of returns risk.
Coverage Percentage
Your "income coverage" is the percentage of expenses covered by guaranteed sources. Higher coverage (70%+) provides more stability. Lower coverage means you'll need larger portfolio withdrawals to maintain your lifestyle.
Closing the Gap
Strategies to reduce your income gap include: delaying Social Security, maximizing pension benefits, adding annuity income, reducing discretionary expenses, or generating additional passive income through real estate or business ownership.
Portfolio Requirement: As a general rule, you'll need approximately 25x your annual income gap saved to support a 4% withdrawal rate. A $2,000/month gap ($24,000/year) requires about $600,000 in portfolio assets.
Need Help Closing Your Income Gap?
Understanding your income gap is the first step. Let's work together to develop strategies that create reliable retirement income and reduce portfolio dependence.
Schedule a ConsultationLong Financial Services | Educational Tool
This tool provides simplified income gap analysis for educational purposes only. Actual retirement income planning requires comprehensive analysis of tax implications, healthcare costs, inflation, market volatility, and longevity risk. This calculator does not account for one-time expenses, changing spending patterns through retirement phases, or the impact of Required Minimum Distributions. Consult with qualified financial professionals to develop a complete retirement income strategy tailored to your specific situation.
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