Retirement income needed calculator
Most retirees need a share of their pre-retirement income rather than all of it. Enter your pay and the share you expect to see the amount in retirement-year prices.
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How to use it
- Enter current annual income, replacement ratio, years to retirement, annual inflation and expected yearly pension (in today's money).
- The result appears straight away and updates as you edit.
- Copy the result, or copy a link that keeps the same values to share it.
How it is calculated
Income needed today = current income × replacement ratio. Income at retirement = income needed today × (1 + inflation)^n, where n is years to retirement. Gap = (needed today − expected pension) × (1 + inflation)^n.
Example
Inputs: Current annual income = 180,000, Replacement ratio = 70 %, Years to retirement = 25 years, Annual inflation = 3 %, Expected yearly pension (in today's money) = 40,000. Result: Yearly income needed at retirement: 263,816.02; Yearly income needed in today's money: 126,000.00; Monthly income needed at retirement: 21,984.67.
Limits and caveats
- A 70% to 80% replacement ratio is a common planning guideline, not a fixed rule: a paid off home can mean less, higher health costs can mean more.
- Inflation is held constant, and taxes and pension increases after retirement are not modelled.
Questions about this tool
What is a replacement ratio?
It is the share of your pre-retirement income you need after you stop working. At 70%, an income of 100000 today calls for 70000 in retirement.
Why is the retirement figure higher?
Prices rise with inflation, so the amount that covers you today must grow to buy the same things 25 years from now.
What do I do with the gap?
It is the income your savings must produce. Divide it by 12 and enter it in the FIRE number calculator to see the savings that would cover it.