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Pension Gap Calculator

Calculate your pension gap and find out how much you need to save each month to maintain your standard of living in retirement.

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years
%

Pension Gap

$1,100.00/month

Required Savings Rate

$396.51/mo.

Required Capital

$330,000.00

Public Pension
$1,200.00
Private Savings
$200.00
Pension Gap
$1,100.00
Desired Income
$2,500.00

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What Is the Pension Gap?

The pension gap describes the monthly shortfall between your desired standard of living in retirement and your expected retirement income. In many countries, average earners receive roughly 40 to 50 percent of their last gross salary as a public pension. For most people, this is not enough to maintain their accustomed lifestyle without additional private savings.

How This Calculator Works

Enter your desired monthly retirement income and subtract your expected public pension and existing private retirement savings. The calculator determines your pension gap and computes the capital you need to accumulate and the monthly savings rate required to get there. The capital calculation is based on the 4-percent rule for sustainable withdrawals.

Why Starting Early Matters

The earlier you start saving, the smaller your monthly contribution needs to be. With 30 years of saving and a 5 percent return, you need only about $396 per month to accumulate $330,000 in capital. With just 15 years, that monthly amount rises to over $1,200. Compound interest works much harder the more time it has.

Strategies to Close Your Pension Gap

Use multiple building blocks for your retirement plan: an index fund savings plan for growth, tax-advantaged retirement accounts for tax benefits, and employer-sponsored plans for matching contributions. Diversify your retirement savings to spread risk. Review your pension projections annually and adjust your strategy when your income changes.

Frequently Asked Questions

The pension gap is the difference between the income you want in retirement and what you will actually receive from public pensions and private savings. A pension gap means you will have less money available than needed to maintain your current standard of living.
Subtract your expected public pension and all private retirement income from your desired retirement income. The remaining difference is your pension gap. Our calculator additionally determines the capital and monthly savings rate needed to close the gap.
A common rule of thumb is 70 to 80 percent of your last net income. In retirement, some costs disappear (commuting, work clothes, savings contributions), while healthcare costs may rise. Your individual needs depend on your lifestyle, housing situation, and personal goals.
You can reduce the pension gap through various measures: private retirement savings (index fund plans, pension insurance), employer-sponsored retirement plans, real estate, or by working longer. The earlier you start, the lower your monthly savings burden thanks to compound interest.

All calculations are for general informational purposes only. Not financial, tax, or legal advice. No guarantee of accuracy. Use at your own risk. Full disclaimer