What is the retirement income gap and how do I calculate mine?

Your retirement income gap is the difference between what you expect to spend each year and the guaranteed income you'll receive. Start by estimating annual expenses in retirement, remembering some costs fall (commuting, retirement saving) while others rise (healthcare, travel early on). Then total your guaranteed income: Social Security, any pension, and annuity payments. Subtract guaranteed income from expenses, and the remainder is the gap your portfolio must fill. Multiply that gap by 25 for a rough estimate of the nest egg required at a 4% withdrawal rate. Knowing the gap tells you whether to keep working, save more, trim spending, or consider an annuity.

The Retirement Planner at wealthserene.com/tools/retirement-planner walks through this step by step.