Retirement Income Gap

The spending-minus-guaranteed-income gap, a fixed nominal return, inflation escalating the gap separately each year, and the year-by-year depletion test.

Overview

The Retirement Income Gap Calculator works out the annual shortfall between what you plan to spend and the guaranteed income you expect, then simulates whether your portfolio can cover that shortfall for the rest of your life. All of its math runs server-side in RetireCalc.Engine.

The income gap

You enter the annual income you need and your guaranteed income streams (Social Security, pension, other) as monthly amounts. The engine annualises the guaranteed income and subtracts it:

“Guaranteed income” here is only what you enter in those three fields — portfolio withdrawals are not guaranteed income; they are what the gap simulation draws down.

The year-by-year simulation

The portfolio starts at the value you enter. The simulation runs for max(1, lifeExpectancy − retirementAge) years. Each year the current gap is withdrawn before the return is applied, then the following year’s gap is escalated by inflation:

• The return is nominal — it is applied as entered, with inflation modelled separately by escalating the gap. It is not a “real return after inflation”.
• A year is flagged low when the ending balance falls below three times that year’s gap.
• The portfolio is depleted the first year the balance reaches zero or below; displayed balances never go negative. If the portfolio never depletes, the gap is reported as covered for the full horizon.

Limitations

• Deterministic and fixed-return — no market variability, no sequence-of-returns risk, no probability of success.
• No taxes, no fees, no RMDs, and no Social Security claiming-age or COLA modelling — the guaranteed-income figure is exactly what you enter, held flat in nominal terms.
• Spending grows only with the single inflation rate; one-time expenses and changing spending patterns are not modelled. For a full projection use the Retirement Calculator.