Retirement Income Replacement Ratio Calculator
Compare your projected retirement income to your working income as a replacement ratio, and see the gap against a target like 80%.
How it works
Replacement ratio = retirement income ÷ pre-retirement income × 100 · Gap = (pre-income × target%) − retirement income
The replacement ratio measures how much of your working income your retirement income reproduces. Most retirees need less than 100% because payroll taxes, retirement saving and some work costs disappear, so planners often aim for 70–85%. A ratio well below your target flags a savings gap you can close with more contributions, a later retirement, or lower planned spending.
Worked example
If you earned $80,000 and expect $55,000 in retirement from savings and Social Security, your replacement ratio is 55,000 ÷ 80,000 = 68.75%. Against an 80% target ($64,000), you are about $9,000 a year short.
Frequently asked questions
What replacement ratio should I aim for?
A common rule of thumb is 70–85% of pre-retirement income, because taxes and saving fall in retirement. Your own number depends on your mortgage status, health costs and lifestyle — someone who plans to travel heavily may want 100% or more.
Does this include Social Security?
Enter your total expected retirement income from every source — Social Security, pensions and portfolio withdrawals — so the ratio reflects everything you will actually receive.
Why do I need less than 100%?
In retirement you stop paying Social Security and Medicare payroll taxes, stop saving for retirement, and often have a paid-off home and lower commuting costs, so the same lifestyle costs less than your full salary.
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Educational estimate using simplified assumptions — not tax, legal or financial advice. Verify limits and rules with the IRS or a qualified advisor.