The question this calculator actually answers
Most retirement calculators tell you what your pot might grow to; this one goes a step further and compares that projection against what your desired retirement income would actually require, converting everything into today's money so the comparison is meaningful rather than distorted by decades of inflation. Enter your current age, planned retirement age, current savings, monthly contributions, the annual income you'd like in retirement (expressed in today's spending power), and your assumed return and inflation, and it shows a projected pot, a required pot, and the resulting shortfall or surplus.
Why everything is converted to "today's money"
A pot of £500,000 in 30 years' time sounds impressive, but it won't buy nearly as much as £500,000 today, once decades of inflation have taken their toll — which is exactly the effect our inflation calculator demonstrates directly. Rather than projecting a large but somewhat meaningless nominal figure, this calculator uses your return assumption minus your inflation assumption (a "real" rate of return) to grow your pot in a way that stays comparable to prices as they stand today, so you can judge it against a retirement income target you'd actually recognise in today's terms.
Where the required pot figure comes from
To work out how large a pot is needed to support your desired income, this calculator uses a 4% sustainable annual withdrawal assumption — the same widely cited (though not guaranteed) starting point used in our pension income calculator. Dividing your desired annual income by 4% gives an estimate of the total pot broadly needed to sustain that income throughout a typical retirement, without unduly high risk of running out. This is a planning simplification rather than a precise formula, and your own safe rate could reasonably be higher or lower depending on how long your retirement needs to last and how the pot is invested during it.
What this deliberately leaves out
This calculator excludes the State Pension entirely, which means your true required pot from your own savings is likely lower than the figure shown here, since the State Pension will cover part of your income need on top of whatever your own pot provides. It also doesn't account for downsizing a property, inheritance, other income streams, or reducing spending in later retirement, all of which commonly feature in real retirement plans. Treat the result as a deliberately cautious, savings-only starting point for the conversation, not a complete personal retirement plan.
What to do if the result shows a shortfall
A shortfall isn't a verdict, it's a prompt to look at the levers available: increasing monthly contributions (even a modest increase compounds meaningfully over a long horizon, as our compound interest calculator illustrates), reviewing whether your pension is invested appropriately for your time horizon, working a little longer than originally planned, or adjusting your desired retirement income to a more achievable target. Running this calculator with a few different combinations of these levers is a genuinely useful way to see which change would close the gap most effectively for your own situation.
A worked example
Using the calculator's defaults — a 40-year-old with £60,000 saved, contributing £400 a month, wanting £25,000 a year in today's money at retirement age 67, assuming a 5.5% return and 2.5% inflation — the required pot works out to £625,000 (£25,000 divided by 4%). The projected pot, grown at a real (inflation-adjusted) rate over the 27 years to retirement, comes to roughly £342,000 — leaving an estimated shortfall of around £283,000 in today's money, before the State Pension is taken into account.
Now suppose that same saver increases their monthly contribution from £400 to £700: the projected pot rises to approximately £507,000, cutting the shortfall to roughly £118,000 — a substantial improvement from a single, sustained change to the monthly contribution, though still short of fully closing the gap on these assumptions alone.
Revisit this every year or two
The gap this calculator shows — whether shortfall or surplus — is only ever a snapshot based on today's savings, today's contribution level, and a set of assumptions about the future that will almost certainly need revising as time passes. Treat it as a recurring check-in rather than a one-off verdict: revisiting it every year or two, adjusting for any change in income, contributions, or retirement goals, keeps your plan honest and gives you the earliest possible warning if you're drifting away from the target rather than discovering a large gap only once retirement is close.
Frequently asked questions
Does this account for the State Pension?
No, deliberately — it focuses on what your own savings and pensions need to provide. Since the State Pension will contribute towards your total retirement income on top of this, your true personal shortfall is likely smaller than the figure shown here.
What if I get a surplus rather than a shortfall?
A projected surplus suggests you may be on track or ahead of your target based on the assumptions used — it's still worth stress-testing with more cautious return and inflation assumptions before relaxing contributions, since actual results can vary from any single projection.
How reliable is the 4% withdrawal assumption used here?
It's a widely referenced historical starting point rather than a guaranteed safe rate for any individual's circumstances — your own appropriate withdrawal rate depends on how long your retirement needs to last, your investment strategy, and your flexibility to adjust spending, which a regulated financial adviser can model more precisely.
What's the single biggest lever if I'm behind on this target?
For most people, increasing the monthly contribution rate has the most direct and controllable effect on the projected pot, since it's usually easier to adjust than working several extra years or accepting a materially lower retirement income, though a combination of smaller changes across several levers often achieves the goal more comfortably than relying on one alone.
Should I redo this with a more cautious return assumption to be safe?
It's a sensible habit — running the numbers once with your best-estimate return and again with a noticeably more cautious one gives you a realistic range for your likely outcome, rather than anchoring your whole plan on a single optimistic assumption that may not play out.