Retirement Income Gap Calculator for New Jersey
Enter what you expect to spend each month in retirement and what will come in from Social Security, a pension and anything else. The difference is your monthly income gap, and multiplied over your planning years it shows how much savings would need to cover.
Estimates only. Figures on this page use published values and the details you enter. They are not a quote, an offer of coverage, or a determination of eligibility. It is a starting point for a planning conversation, not tax, legal or investment advice. Everything is calculated in your browser; nothing you type is sent to us or anyone else.
How the retirement income gap is measured
The calculator compares what you plan to spend each month with the income that arrives no matter what, then stretches the shortfall across your planning years.
Use spending, not income, as the starting point. Many households find their retirement budget is close to current take-home pay minus work costs and savings contributions, plus new costs such as premiums and travel.
- Monthly need: expected retirement spending, in today’s dollars.
- Guaranteed income: Social Security plus any pension plus other steady income such as rent.
- Monthly gap: need minus guaranteed income, or a surplus if income is higher.
- Total gap: monthly gap × 12 × years you plan for.
- No growth, inflation or tax is applied, so the total is a plain starting figure, not a projection.
Guaranteed income = Social Security + pension + otherMonthly gap = need minus guaranteed incomeTotal gap = monthly gap × 12 × years Worked example: a Marlton couple planning 25 years
Hypothetical couple, not clients. They expect to spend $6,200 a month. Their combined Social Security estimate is $3,900 and a rental brings $400, so guaranteed income is $4,300 and the monthly gap is $1,900.
Over 25 years that is $570,000 in today’s dollars, the amount savings, work or other income would have to supply.
Claiming age matters. For people born in 1960 or later, full retirement age is 67, and claiming at 62 cuts the benefit by about 30% for life (SSA). If the $3,900 assumed claiming at 67, claiming at 62 would make it about $2,730 and widen the monthly gap to $3,070.
The gap is a starting point for a conversation, not a verdict on whether they can retire.
Every figure here is in today’s dollars, so revisit the numbers each year as prices, benefits and plans change.
Waiting works the other way. Each year past full retirement age, up to 70, adds delayed retirement credits, so a later claim shrinks the gap for life, including for whichever spouse survives.
| Item | Claim at 67 | Claim at 62 |
|---|---|---|
| Social Security | $3,900 | $2,730 |
| Monthly gap | $1,900 | $3,070 |
| Gap over 25 years | $570,000 | $921,000 |
Illustration: a hypothetical example built from the rules and figures cited on this page, not a quote.
Retirement income planning mistakes
- Leaving out health costs. The 2026 standard Part B premium alone is $202.90 a month per person (CMS), before drug coverage or a supplement. Retiring before 65 adds the cost of other health coverage until Medicare starts.
- Using the gross benefit. On Medicare, Part B is usually deducted before your Social Security deposit arrives.
- Planning for two incomes forever. When one spouse dies, the household keeps only the larger of the two Social Security benefits.
- Ignoring inflation. A gap measured in today’s dollars grows every year prices rise.
- Treating any promise as a guarantee. Annuity guarantees depend on the claims-paying ability of the issuing company.
- Drawing down savings with no plan for the order. Which accounts you tap first affects federal and New Jersey income taxes and IRMAA two years later.
- Claiming the day you stop working. Your retirement date and your Social Security claiming date are separate decisions; savings or part-time work can bridge the years between them.
New Jersey details that change retirement income
New Jersey does not tax Social Security benefits (NJ Division of Taxation). The federal Social Security Fairness Act, signed January 5, 2025, repealed the Windfall Elimination Provision and Government Pension Offset, which matters for retired public employees with a pension (SSA).
New Jersey tax: if you or your spouse are 62 or older or disabled, the Division of Taxation lets you exclude pension, annuity and IRA income of up to $100,000 on a joint return, $75,000 single or $50,000 married filing separately when total income is $100,000 or less. A partial exclusion applies up to $150,000 of total income, and above that there is none.
Before 65, health coverage is a separate cost to plan for. Once you reach 65, Medicare premiums and the drug plan become part of the monthly need.
Costs differ a lot between North Jersey, the shore and South Jersey, so a move in retirement can change the monthly need as much as any claiming decision.
If you want guaranteed income beyond Social Security and a pension, an annuity is one option among several. Annuities are insurance products overseen in New Jersey by the Department of Banking and Insurance, and their guarantees depend on the issuing company.
Key terms: Retirement income gap
- Full retirement age
- The age at which you receive your unreduced Social Security benefit: 67 if born in 1960 or later.
- Delayed retirement credits
- Increases for waiting past full retirement age, up to age 70.
- Survivor benefit
- The payment a widow or widower can receive based on a late spouse’s record.
- Pension exclusion
- A New Jersey exclusion for qualifying pension, annuity and IRA income on the state return, for people 62 or older or disabled.
- Income floor
- Guaranteed monthly income that covers essential expenses regardless of markets.
Bring these to a retirement planning review
- Your my Social Security statement with estimates at 62, full retirement age and 70.
- Pension estimates and survivor options.
- A monthly spending list by category.
- Retirement account balances and your health coverage plan before and after 65.
What this assumes
- Every figure is one you enter, in today’s dollars.
- No inflation, investment growth, taxes or cost-of-living increases are applied. It is a simple first look.
- Your Social Security estimate is in your my Social Security account at ssa.gov.
- Annuities are insurance products. Guarantees depend on the claims-paying ability of the issuing company.
- This is a starting point for a no-cost Income Strategy Session, not tax, legal or investment advice.
Where the figures come from
- SSA: benefit reduction for early retirement Social Security Administration, 2026
- SSA: Social Security Fairness Act Social Security Administration, 2025
- New Jersey Division of Taxation: retirement income exclusions (NJ-1040) New Jersey Department of the Treasury, Division of Taxation, 2026
- CMS 2026 Medicare Part B premium, deductible and IRMAA amounts Centers for Medicare & Medicaid Services, 2026
What a simple income gap leaves out
- Inflation, taxes and investment returns.
- Required minimum distributions and the order of withdrawals.
- Long-term care costs.
- Social Security claiming strategy for couples.
- Spousal benefit rules for a lower-earning spouse.
Book a no-cost Income Strategy Session with Jackie. Bring your Social Security statement from your my Social Security account and any pension estimate, and we will look at income options together. This is not tax, legal or investment advice.
Final expense, annuity and supplemental products are subject to underwriting and carrier approval. Guarantees are based on the claims-paying ability of the issuing company. Nothing on this site is tax, legal or investment advice.
In clients' words
What working with Jackie looks like
Jackie provided amazing service, very helpful, and made me feel like I understood my options and assisted in the perfect choice.
Verbatim client reviews, as published on the agency's own website.
Common questions
What is a retirement income gap?
The difference between what you plan to spend each month and the income that will arrive regardless, such as Social Security and pensions. Savings, work or an annuity have to fill it.
Where do I find my Social Security estimate?
In your my Social Security account at ssa.gov, which shows estimates at different claiming ages.
Can an annuity close a retirement income gap?
An income annuity turns part of your savings into payments that can last for life. It is an insurance product; guarantees depend on the claims-paying ability of the issuing company, and it is not right for everyone.
Do you need a consultation?
Tell Jackie about your current situation. Telephone, Zoom or in person, at no cost to you. Call or text (856) 727-4221.
Serving South Jersey and all of New Jersey · (856) 727-4221
Content reviewed by Jackie Layser, Licensed Medicare Insurance Agent at Garden State Medicare Solutions, New Jersey, helping Medicare clients since 2008. How we source and review our content. Last updated .