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Income Floor

A current-dollar snapshot of essential expenses versus guaranteed income, and the SPIA premium that would close the gap.

Overview

The Income Floor Calculator compares your essential monthly expenses against your guaranteed monthly income and, if there is a gap, estimates the immediate-annuity premium that would fill it. It is a single-point snapshot in current dollars — not a lifetime projection. All of its math runs server-side in RetireCalc.Engine.

This calculator does not model inflation, a portfolio, investment returns, taxes, or the passage of time. It answers “where do I stand today?” and “roughly what would an annuity to close the gap cost?”.

Essential expenses and guaranteed income

Essential expenses are the sum of the five monthly categories you enter (housing, food, healthcare, utilities, insurance) — or a single override amount if you provide one. Guaranteed income is the sum of your Social Security, a spouse’s Social Security, a pension, and any other guaranteed monthly income:

coverage% = guaranteedIncome ÷ essentialExpenses × 100
monthlyGap = max( 0, essentialExpenses − guaranteedIncome )
annualGap = monthlyGap × 12

Portfolio withdrawals are not counted as guaranteed income. The floor strategy is specifically about covering essentials with income that lasts for life regardless of markets.

The SPIA premium estimate

To close the gap, the calculator looks up a single-premium immediate annuity (SPIA) payout rate for your age and gender from a table of approximate mid-2025 market estimates for a life-only contract, then divides the annual gap by that rate:

spiaPremiumNeeded = annualGap ÷ spiaPayoutRate( age, gender )

Age is defaulted to 65 if blank and clamped to the table’s supported range (up to 80). The calculator also shows four partial options — premiums of $50,000, $100,000, $150,000, and $200,000 — each with the monthly income it would add (premium × spiaPayoutRate ÷ 12), the new coverage percentage (capped at 200%), and the remaining gap.

SPIA payout rates are illustrative. Real quotes vary by insurer, state, interest-rate environment, and payout options (period-certain, joint-and-survivor, cash refund), none of which are modelled here. The deeper annuity payout math — including deferred contracts — lives on Pensions & Annuities.

Limitations

  • A current-dollar snapshot — no inflation, so a gap that looks small today grows in real terms over a long retirement.
  • No portfolio, no investment returns, no taxes on the annuity income, and no health underwriting.
  • Life-only payout rates only — a joint-and-survivor annuity to protect a spouse costs more than shown.
  • For a lifetime gap simulation with a portfolio, use the Retirement Income Gap Calculator; for a full plan, the Retirement Calculator.

Related calculators

Income Floor Calculator →Retirement Income Gap Calculator →Annuity Income Calculator →Retirement Calculator →

Related guides: Guaranteed Income Guide · Annuities Guide