Retirement Income Gap Calculator
King Legacy Group

How Large Is Your Retirement Income Gap?

Most people do not know how much income their savings will actually produce in retirement, or how far short it falls from what they need. Enter your numbers below and see your gap in under two minutes.

Calculate My Gap

Three things most people get wrong about retirement income

A savings balance is not a paycheck

A $500,000 balance at a 4% withdrawal rate produces $20,000 a year, or $1,667 a month. Whether that is enough depends entirely on your income target and what else is coming in.

Social Security covers less than most expect

The average Social Security benefit in 2025 is approximately $1,976 per month. For higher earners, it replaces an even smaller share of pre-retirement income, often 30 to 40 percent.

Longevity turns a small gap into a large one

One in three women and one in four men who reach age 65 will live past 90. A gap of $1,000 per month at retirement becomes a $300,000 problem over 25 years, before accounting for inflation.

Your Numbers

Adjust anything. Results update as you type.

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Include all retirement savings combined: 401(k), IRA, brokerage accounts, and any other investment accounts. Enter the total across all accounts.
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Check your actual estimate at ssa.gov/myaccount. The auto-estimate uses 40% of current income, a standard approximation for middle-income earners.
When do you plan to claim Social Security?
The ssa.gov estimate is your full retirement age benefit. Selecting early or delayed applies the standard Social Security actuarial adjustment.
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Include any defined benefit pension, rental income, or other predictable income source. Leave at zero if none applies.

Growth and Income Assumptions

Research-backed defaults. Adjust to match your situation.

Applied to your existing savings plus monthly contributions through your retirement date. A 5% rate reflects a moderate balanced portfolio in the accumulation phase.
The share of current income you want to replace in retirement. This calculator auto-sets by income tier: under $40,000 uses 85%, $40,000-$60,000 uses 80%, $60,000-$80,000 uses 70%, $80,000-$100,000 uses 65%, above $100,000 uses 60%. These tiers reflect Horner research and T. Rowe Price benchmarks. Adjust if your situation differs. Changing your income above resets the auto-default.
Fixed assumptions used in this calculator
Safe withdrawal rate from savings4%
Fixed Index Annuity payout rate (income rider)5.5%
Multi-Year Guaranteed Annuity accumulation rate5.0%
7702 account growth rate5.5%

The 4% withdrawal rate is based on Morningstar’s 2025 research on a 30-year retirement. Annuity rates are illustrative; actual rates vary by carrier and product. All figures shown in today’s dollars.

Your Retirement Income Picture

Income you want
$55,250
per year (65% of current income)
Projected from savings
$15,914
at 4% from $397,857 at retirement
Social Security
$34,000
estimated annual benefit
Your projected income covers 90% of your retirement target100% target
Your Retirement Income Gap
$5,336/year
$445 per month
Your projected income of $49,914/year falls $5,336 short of your $55,250 target. Here is what closes it.
What if you saved more?Drag to see how additional monthly savings close the gap
$0/mo

What Closes This Gap

With 15 years before retirement and time on your side, a tax-free retirement account has the runway to accumulate meaningfully. Here is how this gap is typically addressed for your age and timeline. Every situation is different, and the right fit depends on your full financial picture, which is what the strategy review is designed to find.

Recommended for your timeline

Tax-Free Retirement Account (7702 Account)

With 15 years before retirement, a tax-free retirement account named after Section 7702 of the Internal Revenue Code has time to accumulate meaningfully. Funded with after-tax dollars, it grows with a floor that protects it from market losses and is accessed tax-free in retirement, giving you income that does not count against Social Security or push you into a higher bracket.

$479
approximate monthly contribution to build a reserve that generates $5,336/year in tax-free income over 15 years, at a 5.5% growth rate

Illustrative. Your actual numbers come from a carrier illustration reviewed with a King Legacy Group advisor.

Also: Fixed Index Annuity (FIA) for Guaranteed Income

If you want to lock in a portion of the gap as guaranteed income regardless of market conditions, a Fixed Index Annuity with a lifetime income rider converts a lump-sum premium directly into a monthly check you cannot outlive. This can work alongside a 7702 account, with the annuity covering essential expenses and the 7702 account providing flexible, tax-free income above that floor.

$97,013
approximate premium at a 5.5% payout rate to generate $5,336/year in guaranteed lifetime income

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Send yourself a copy of this analysis. A King Legacy Group advisor will follow up to walk you through what it means for your retirement plan.

Common Questions

What is the retirement income gap?

The retirement income gap is the difference between the income you want in retirement and the income your savings, Social Security, and other sources are projected to provide. Closing that gap before you retire is the central planning challenge for most Americans.

Why is the income replacement ratio less than 100 percent?

In retirement, certain costs typically drop: payroll taxes, commuting, and work-related expenses. A commonly used benchmark is 70 to 80 percent of pre-retirement income for middle-income households. Higher earners often target a lower percentage because a smaller share of their income goes toward necessities. This calculator sets the default based on your income level, and you can change it.

What is a Fixed Index Annuity?

A Fixed Index Annuity (FIA) is a contract with an insurance company that provides guaranteed lifetime income regardless of how long you live. Your account can credit interest based on a market index, but a floor protects you from market losses. A lifetime income rider added to a Fixed Index Annuity converts a lump sum into a guaranteed monthly income stream you cannot outlive, which makes it a common tool for closing a retirement income gap.

What is a Multi-Year Guaranteed Annuity?

A Multi-Year Guaranteed Annuity (MYGA) is the annuity equivalent of a bank CD. You deposit a lump sum and the insurer guarantees a fixed interest rate for a set number of years, typically three to seven. Multi-Year Guaranteed Annuities are useful when you are close to retirement and want to lock in a guaranteed rate on a portion of your savings before converting it to lifetime income.

What is a 7702 account?

A 7702 account is a tax-free retirement account named after Section 7702 of the Internal Revenue Code, the same way the 401(k) is named after its section. Funded with after-tax dollars, it grows with a floor that prevents market losses from reducing the balance, and you access the money tax-free in retirement. It works best when you have ten or more years to accumulate.

Are these projections guaranteed?

No. This calculator is an educational estimate. Actual results depend on your specific savings rate, investment returns, Social Security benefit, healthcare costs, inflation, and many other factors. Use this as a starting point for a conversation with a King Legacy Group advisor, who can build a plan around your actual numbers.

See Your Real Retirement Plan

This calculator shows you the gap. A King Legacy Group strategy review shows you how to close it, using strategies built around your specific goals, timeline, and assets. Everyone wants to grow their money, protect it from loss, and pay less in taxes. King Legacy Group does all three simultaneously. Your LivingLEGACY™ Designed.

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Complimentary. No pressure. A clear path to your LivingLEGACY™.

Important. This calculator is for educational purposes only. It is a simplified estimate, not a prediction, a guarantee, or personalized financial, tax, or legal advice. Results depend on many variables not captured here, including account fees, actual investment returns, tax law changes, healthcare costs, and individual circumstances. Social Security estimates are approximations only; visit ssa.gov/myaccount for your actual projected benefit. Annuity illustrations are based on illustrative payout rates and do not represent a guarantee from any specific carrier. A Fixed Index Annuity (FIA) and Multi-Year Guaranteed Annuity (MYGA) are insurance products subject to carrier terms and state availability. A 7702 account involves a life insurance policy and may require health qualification. Consult a qualified advisor before making any financial decision.