Your Retirement Income Picture
Compare your expected monthly spending in retirement with the income you expect to receive, and see whether there is a gap. Nothing you enter is saved or sent anywhere.
All amounts are monthly, in today's dollars. Blank fields count as zero.
Use one approach consistently so nothing is counted twice. If your spending figure leaves out income taxes and costs deducted before money reaches you, such as Medicare premiums deducted from Social Security, enter your income after those deductions. If your spending figure includes them, enter your income before deductions.
Your expected spending
If you have used Your Monthly Budget and Spending, you can enter its total here. The two tools do not share information.
Your expected income
Your Social Security estimates are available in your free my Social Security account.
Planned monthly withdrawals from savings
Withdrawals from a traditional IRA or 401(k) are generally taxable. Qualified withdrawals from a Roth IRA or Roth 401(k) generally are not. That is why the mix matters.
Count each payment once. If an IRA-funded annuity payment is entered under Annuity payments, do not also enter it under traditional IRA withdrawals.
Some entries are not valid amounts. Results are marked Incomplete until corrected. Enter positive numbers only, such as 1250 or 1,250.50.
The annual estimate equals the monthly difference multiplied by twelve. It assumes the income and expenses entered continue throughout the year.
Decisions worth planning together
Retirement income decisions affect one another. A choice that looks sensible on its own can raise your taxes or Medicare premiums, or leave a surviving spouse with less income, and some choices cannot be undone. That is why both spouses should plan them together, ideally with a qualified tax or financial professional.
Questions to work through:
- Which accounts will we draw from first, and in what order?
- Do Roth conversions make sense before required minimum distributions begin, and how much each year?
- When will each spouse start Social Security? See Deciding When to Start Social Security.
- When do our required minimum distributions begin? See the IRS required minimum distribution worksheets.
- How will these choices affect our income taxes, including how much of our Social Security is taxed?
- Could higher income raise our Medicare premiums in later years?
- If one of us dies first, what income continues for the survivor?
- Would more guaranteed lifetime income, from Social Security, a pension, or an annuity, help us worry less about market swings? If we are considering an annuity, what would it cost, and what would we give up?
- How would we pay for long-term care, or for health coverage if we retire before Medicare? See Planning for Long-Term Care.
- Which of these choices are permanent once made?
A note on annuities. An annuity is an insurance contract that can provide income for life. They come in several types, and some are complex. Some people value that certainty, especially if they are healthy and expect a long retirement. Annuities can also carry fees and surrender charges, limit access to your money, and lose purchasing power over time if payments are fixed. Payments depend on the insurance company's ability to pay. Whether an annuity fits depends on your health, the size of your savings, your other income, and how you plan to pay for long-term care. A licensed professional can explain the options; it is fair to ask how that person is paid. To learn the basics, see Investor.gov from the U.S. Securities and Exchange Commission.
This tool adds up the amounts you enter. It does not evaluate whether your savings can support the withdrawal you entered, which depends on factors it does not consider, such as investment returns, taxes, rising prices, and how long retirement lasts. It is general education, not personal financial advice. A qualified professional who knows your circumstances can help you look at the full picture.
To learn more about Social Security timing, see Deciding When to Start Social Security.
To go deeper, see the chapters “Turning a Lifetime of Savings into a Lifetime of Income” and “Keeping More of What You Earn” in The Wealth You Build: A Lifetime of Financial Wisdom.