Planning & projections
How far from the retirement goal, and what closes the gap
A retirement shortfall calculator: clients enter savings, contributions, years and a goal, and see the projected balance, the gap and the extra monthly saving that would close it.
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How do I calculate my retirement savings shortfall?
Grow current savings and monthly contributions to retirement at an assumed return, compounded monthly. Subtract that projection from the savings goal. If the result is positive, it is the shortfall; spreading it over the remaining months at the same return gives the extra monthly contribution needed to reach the goal.
Open enrollment, when contribution rates are set
Clients usually have a number in mind, from a seminar, a rule of thumb or a previous plan, and want to know how far off they are. The question is sharpest at open enrollment and at year-end bonus time, when they can actually change how much they save.
What the client types into a search box
“how much more do I need to save each month to retire”
How a client works through it
Enter savings and contributions
Current retirement savings and the monthly amount being added.
Set years and return
Years until retirement and an assumed annual return.
Enter the goal
The savings target the client is aiming for.
See the gap
Projected balance, goal, shortfall or surplus and extra monthly needed.
What lands in your inbox
When a client asks your firm to review the result, the request arrives as a contact record with their inputs and results attached, by email and, on paid plans, by webhook to your CRM.
Received
Current savings, contributions, years until retirement and the goal show the size and urgency of the gap. A big shortfall with few years left is an urgent planning conversation. Business owners with large gaps may benefit from a solo 401(k), SEP or cash balance plan.
How should a client read 'extra monthly needed'?
Projected at Retirement is where current habits lead. Shortfall / Surplus compares it with the Retirement Goal. Extra Monthly Needed is the added monthly saving, at the same return, that would close a shortfall by the retirement date.
The goal is the weakest input. If it came from a rule of thumb, the retirement planner, which builds the goal from income needs and inflation, gives a better target.
Results shown: Projected at Retirement · Retirement Goal · Shortfall / Surplus · Extra Monthly Needed.
What makes a shortfall calculator useful to a firm?
It converts a vague worry into an action: a monthly figure. That is a natural bridge to a planning engagement or, for CPA firms with business-owner clients, to a conversation about a retirement plan for the business, which can raise contribution capacity substantially.
Because the client brings their own goal, the request also tells you whether that goal is grounded in anything, which is often the first thing to address.
Follow-ups this request opens
- Validate the retirement goal against an income-based plan
- Raise contributions through payroll or a new retirement plan
- Review asset allocation and expected returns
- Consider working longer or partial retirement scenarios
What this calculator leaves out
- Does not model inflation; the goal should be in future dollars.
- Ignores taxes and investment fees.
- Constant return compounded monthly.
- Does not include employer match separately.
Platform disclaimer shown under the calculator: Estimates only. Assumes a constant return compounded monthly with level contributions; inflation, taxes and variable returns are not modeled.
Compliance note for firms
Projections of account growth can be hypothetical performance when presented by an adviser. Keep the return assumption visible and client-controlled, and explain methodology and limits. A recommended contribution change is advice and should consider the client's cash flow and tax position.
Not legal advice. See our disclaimer and the guide to compliance for client calculators.
Terms your client sees in the calculator
These definitions appear in the calculator's collapsible Definitions block, so clients don't have to call to ask what a label means.
- Shortfall / surplus
- The difference between your projected savings at retirement and your goal. A shortfall is the gap your current plan leaves; a surplus means the plan exceeds the goal at the assumed return. It comes from constant assumptions, so it is best used to compare scenarios, such as a higher contribution or a later retirement, rather than as a precise forecast.
- Retirement savings goal
- The balance you want on your retirement date, often called a nest egg. This calculator takes it as a fixed target in future dollars and does not inflate it for you. If you set the goal in today’s prices, raise it for expected inflation, or use a return net of inflation, to keep the comparison realistic.
- Extra monthly needed
- The additional monthly contribution that, at the same return and time horizon, would close the shortfall by your retirement date. It is spread over all the remaining months, so starting earlier lowers it considerably. If the plan already shows a surplus, no extra saving is needed under these assumptions.
- Future value
- What a present balance plus regular contributions will grow to by a future date at an assumed return. The projected-at-retirement result is a future value: your current savings compounded for the years until retirement, plus the grown value of every monthly contribution. It is stated in future dollars, not adjusted for inflation.
- Monthly compounding
- Adding returns to the balance each month, so the next month’s growth is figured on a slightly larger amount. The calculator converts your annual return to a monthly rate and applies it to both current savings and each monthly contribution. At the same stated rate, monthly compounding produces slightly more than annual compounding.
- Annual return
- The average yearly investment return you expect, used here as a constant rate compounded monthly. Actual returns vary from year to year and are not guaranteed. Because its effect compounds over decades, testing a lower return alongside your base case shows how sensitive the shortfall is to this single assumption.
In our glossary: Future value · Compound interest
Retirement Shortfall calculator: questions from firms and clients
Where should my retirement goal come from?
Ideally from income needs. The retirement planner builds a goal from income, years and inflation.
Does it include inflation?
No. Enter the goal in future dollars, or use the planner, which handles inflation.
Does it include employer contributions?
Include them in the monthly contribution figure.
What return should I assume?
One that fits the portfolio. Testing a lower return shows how sensitive the gap is.
What if I have a surplus?
A surplus suggests the goal may be reached early, or that tax and withdrawal planning matter more than saving more.
Are taxes included?
No, the projection is pre-tax.
Can business owners close a big gap faster?
Often, with a solo 401(k) or other employer plan. See the solo 401(k) calculator.
Which plan includes it?
Network. See pricing.
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Clients who ask this usually ask next
Retirement Planner
am I on track to retire at 65
401(k) / 403(b) / 457
how much should I contribute to my 401k to get the full match
Solo 401(k)
how much can I put in a solo 401k as a freelancer
All “Planning & projections” calculators · Everything in Retirement
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