Retirement · Income gap
Retirement income gap calculator.
Add up the income you can count on, subtract it from the spending you want, and see the yearly gap and the portfolio needed to fill it.
Income gap = yearly spending − guaranteed income. Spending $60,000 with $900 a month from CPP and $762.50 a month from OAS ($19,950 a year) leaves a gap of $40,050, which at a 4% withdrawal rate needs a portfolio of about $1,001,250.
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How the gap is calculated
Add the income you can count on for life: your public pension (CPP/QPP in Canada or Social Security in the US), OAS, any workplace pension and other steady income. Subtract it from the yearly spending you want. What is left is the gap your savings must pay for. Dividing the gap by a withdrawal rate gives the portfolio needed, the same 25x logic as the 4% rule, applied only to the part guaranteed income does not cover.
Worked example. Spending $60,000 a year. CPP $900 a month plus OAS $762.50 a month is $1,662.50 a month, or $19,950 a year, which covers 33.3% of spending. The gap is 60,000 − 19,950 = $40,050 a year ($3,337.50 a month). At 4% the portfolio needed is 40,050 ÷ 0.04 = $1,001,250. If you have $600,000, it pays $24,000 a year at 4%, so you are still $16,050 short each year and need $401,250 more.
The OAS default is the maximum monthly pension for people aged 65 to 74 for October to December 2026 from the Government of Canada’s payment amounts page, which also lists a higher maximum at 75 and over and says amounts are reviewed each quarter against the Consumer Price Index. It says your OAS depends on your age, how long you have lived in Canada after 18 and your income, and is subject to a recovery tax above an income threshold. The CPP and Social Security figure has no default of record: use your own statement.
Frequently asked questions
What is a retirement income gap?
The difference between the yearly spending you want in retirement and the income you can count on, such as CPP or Social Security, OAS and a workplace pension. Savings must cover it.
Is 70% of my working income the right target?
Replacing around 70% of pre-retirement income is a common rule of thumb, not a published standard. This tool starts from the spending you expect instead, which is usually more accurate for you.
Do I enter amounts before or after tax?
Use the same basis for all of them. Entering spending after tax and pensions after tax gives the cleanest answer. The tool does not compute tax.
Where do I find my CPP or Social Security estimate?
In your own government account statement. The figure in this tool is only an example.
Sources
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Runs entirely in your browser. Nothing you type is sent or stored. Formulas are standard arithmetic; assumptions such as returns are yours to set.
Not advice
Estimate only. Government benefit amounts change and depend on your own record. Not financial, tax or investment advice.