At age 43, this household has $180,000 across three retirement accounts and contributes $950 personally plus $300 from an employer each month. The calculator projects $978,696 in today’s dollars at age 67, compared with a required portfolio of $1,016,290. On that same today’s-dollar basis, the gap is -$37,594.
A large projected balance is not readiness by itself. It must be compared with desired spending, other retirement income, inflation treatment, retirement length, and post-retirement return. This example makes those connections before testing a larger contribution and a two-year delay.
Scenario at a glance
- Years until retirement
- 24
- Age 43 to 67
- Current retirement savings
- $180,000
- Three entered accounts
- Projected portfolio
- $978,696
- Today’s dollars
- Funding position
- -$37,594
- Projected minus required, in today’s dollars
The household assumptions
| Input | Value | Treatment |
|---|---|---|
| Current / retirement age | 43 / 67 | 24 accumulation years |
| Life expectancy | 92 | 25 planned retirement years |
| Current income | $110,000 | Used with replacement rate |
| Desired replacement rate | 75.0% | $82,500 annual target today |
| Inflation | 2.5% | Results shown in today’s dollars |
| Post-retirement return | 4.5% | Applied during withdrawals |
| Other retirement income | $2,600/month | Starts at age 67 |
| Account | Current balance | Personal monthly | Employer monthly | Pre-retirement return |
|---|---|---|---|---|
| Workplace 401(k) | $140,000 | $700 | $300 | 6.5% |
| Roth IRA | $30,000 | $150 | $0 | 6.5% |
| Taxable brokerage | $10,000 | $100 | $0 | 6.0% |
Worked example
Translate retirement spending into a portfolio test
Set the annual retirement income target
$110,000 × 75.0% = $82,500
This is a planning target in today’s dollars, not a recommended spending level.
Account for other retirement income
$151,233 desired − $57,194 other income = $94,039 first-year portfolio withdrawal
The calculator grows income sources according to their entered COLA and aligns them with retirement timing.
Solve the required portfolio
$1,016,290
The solver funds monthly retirement gaps through age 92 using the post-retirement return assumption.
Project the actual portfolio
$978,696
Current balances, personal contributions, employer contributions, annual increases, and account returns create this result.
Measure readiness
$978,696 − $1,016,290 = -$37,594
The sign and funding ratio make the large balance interpretable on one consistent purchasing-power basis.
Projected balance during accumulation
| Measure | Result |
|---|---|
| Projected portfolio at retirement | $978,696 |
| Required portfolio | $1,016,290 |
| Funding ratio | 96.3% |
| Funding surplus or gap (today’s dollars) | -$37,594 |
| Readiness status | Portfolio depletes during retirement |
| First retirement month income target | $12,461 |
| First retirement month other income | $4,712 |
| First retirement month portfolio withdrawal | $7,748 |
| First retirement month unfunded income | $0 |
Where the projected portfolio comes from
Across accumulation, the baseline records $346,809 of personal contributions and $86,400 of employer contributions. Modeled accumulation growth adds $1,156,983. These sources, together with the current $180,000, reconcile to the projected nominal portfolio; the displayed today’s-dollar value is lower after inflation adjustment.
Sources of the projected nominal balance
Two ways to change the gap
The increased-contribution scenario adds $600 per month to the workplace account while holding ages, return assumptions, spending target, and income source constant. The later-retirement scenario keeps the original contribution but retires at 69. Delaying retirement creates more accumulation time and fewer modeled withdrawal years; it can therefore affect both sides of the readiness equation.
Baseline and adjusted plans
| Plan | Retirement age | Personal monthly now | Projected portfolio | Required portfolio | Today’s-dollar gap | Status |
|---|---|---|---|---|---|---|
| Baseline | 67 | $950 | $978,696 | $1,016,290 | -$37,594 | Portfolio depletes during retirement |
| +$600 monthly | 67 | $1,550 | $1,245,027 | $1,016,290 | $228,737 | Projected surplus |
| Retire at 69 | 69 | $950 | $1,080,653 | $951,812 | $128,841 | Projected surplus |
Understand what a funding gap represents
The funding gap is a portfolio comparison at retirement, not an invoice due today. It says how far the projected assets are above or below the amount the same model requires to meet monthly income gaps through life expectancy. A negative value can be addressed over many years through contributions, timing, spending, or assumptions; a positive value is still exposed to market and life uncertainty.
Other income reduces the amount withdrawn from the portfolio only after its entered starting age. If retirement began before that income source, the portfolio would bridge the early years. In this example both start at age 67, so the first retirement month already includes the modeled income. Changing that start age can alter required assets even if the monthly benefit estimate stays the same.
Employer contributions deserve separate visibility because they may depend on employment and plan rules. The scenario assumes the entered $300 monthly amount continues and does not grow. A job change could remove it, increase it, or change vesting. Recalculate rather than carrying the old employer amount into a new employment situation.
Limits and actions to test
Constant returns and inflation cannot reproduce real market sequences. Taxes, account withdrawal rules, healthcare shocks, long-term care, fees, and changes to other income may alter actual results. The calculator does not guarantee that any withdrawal path is sustainable. For the concepts behind the readiness test, read the retirement readiness fundamentals guide.
- Enter each account and employer contribution separately.
- Keep today’s-dollar reporting consistent with today’s spending target.
- Compare the baseline funding ratio with a contribution-only change.
- Test retirement age separately so its effect remains visible.
- Rerun the model after material changes to income, savings, spending, or expected retirement income.