Retirement Ratio Calculator

Planning for retirement is one of the most important steps in financial security. One of the easiest ways to measure how well-prepared you are is by calculating your Retirement Ratio.

The Retirement Ratio tells you what percentage of your current annual income will be replaced by your expected retirement income. A higher percentage means you’ll maintain a lifestyle closer to your present one after retirement.

Formula for Retirement Ratio

The formula is:

$\text{Retirement Ratio (\%)}=\left(\frac{\text{Expected Retirement Income}}{\text{Current Annual Income}}\right)\times 100$

Step-by-Step Process

1. Enter your Current Annual Income.
2. Enter your Expected Retirement Income (annual).
3. Apply the formula to calculate your retirement ratio.
4. Interpret the result:

• 70% or higher → Generally considered good.
• Below 70% → May need to save or invest more for retirement.

Example of Retirement Ratio Calculation

Suppose:

• Current Annual Income = $80,000
• Expected Retirement Income = $60,000

$\text{Retirement Ratio (\%)}=\left(\frac{60,000}{80,000}\right)\times 100=75\%$​​​​​​​

So, the retirement ratio is 75%, meaning you can replace 75% of your current income after retirement.

Why Use a Retirement Ratio Calculator?

• Quick Check – See if your retirement savings are on track.
• Clear Insights – Understand how much of your lifestyle can be maintained.
• Better Planning – Adjust savings, investments, or expenses to improve your ratio.