Retirement Shortfall Calculator

Use this calculator to estimate the gap between projected retirement savings and your target amount.

What this calculator does

The retirement shortfall calculator projects your savings to retirement age and compares the result with your target. It also estimates the additional monthly contribution needed to close a gap.

It uses:

• current age
• retirement age
• current savings
• monthly contribution and target amount

Retirement Shortfall Formula

Shortfall = Target Retirement Amount - Projected Savings

Where:

• Target = desired retirement balance
• Projected Savings = future value of savings and contributions
• Shortfall = amount below target
• Surplus = amount above target

Example calculation

If:

• Target retirement amount = 1,500,000
• Projected savings = 1,200,000
• Shortfall = 1,500,000 - 1,200,000
• Shortfall = 300,000

Then:

• The plan is below target
• Extra monthly saving is calculated over the remaining years
• If the needed extra amount is 500
• The monthly contribution should rise by 500

The estimated shortfall is 300,000.

What is a retirement shortfall?

A retirement shortfall is the gap between the money you are projected to have and the money you expect to need. It is a planning signal, not a final verdict.

Why retirement shortfall matters

• shows whether the current plan is underfunded
• helps size the required savings increase
• supports earlier course correction
• makes retirement targets more concrete

When to use this calculator

• checking progress against a target
• deciding whether to raise contributions
• testing different retirement ages
• reviewing annual retirement planning assumptions

Common mistakes

• setting a target without estimating expenses
• ignoring inflation in the target amount
• assuming investment returns will be smooth
• waiting too long to adjust contributions

Retirement shortfall vs retirement readiness

Shortfall measures the currency gap to a target. Readiness expresses progress as a percentage of the target.

Both describe the same plan from different angles.

FAQs

What is a retirement shortfall?

A retirement shortfall is the amount by which projected savings fall below the retirement target.

How do you calculate retirement shortfall?

Project savings to retirement age, then subtract projected savings from the target amount.

What is a good retirement shortfall?

The best shortfall is zero or less, meaning projected savings meet or exceed the target.

What is the difference between shortfall and readiness?

Shortfall is the gap in money. Readiness is the percentage of the target covered.