When to use this calculator
Compare entered future income with current annual income on a consistent basis. Use either gross or net income consistently. No country pension entitlement is calculated.
Explore the personal budget calculators for other questions in this topic. For a related calculation, use the Inflation Future Cost Calculator: Estimate a future price using an annual inflation rate you choose.
PUTTING IT INTO PRACTICE
Income Replacement Ratio: a worked example
The values below are an illustrative example, not a recommendation. Replace them with measurements or assumptions that match your question.
| Input | Example value |
|---|---|
| Expected retirement income | 24,000 |
| Pre-retirement annual income | 40,000 |
| Result | 60 % |
- Check the input labels and enter the example values above.
- Apply the relationship: Replacement (%) = expected income/prior income × 100.
- The result is 60 %, rounded for display.
How to interpret your result
Use either gross or net income consistently. No country pension entitlement is calculated.
Use a consistent monthly or annual period for both income and expenses. A savings rate is a share of income, while an emergency fund is an amount based on a chosen expense horizon. Targets are assumptions you set rather than universal rules.
Frequently asked questions
Are the default amounts recommended targets?
No. They are illustrative values showing how each calculation works. Replace them with amounts appropriate to your situation.
When is the income replacement ratio calculator useful?
Compare entered future income with current annual income on a consistent basis. Use either gross or net income consistently. No country pension entitlement is calculated.
How do I use the income replacement ratio calculator?
Enter expected retirement income, pre-retirement annual income. The result updates automatically. Use the units shown beside each input; the example values illustrate the method.
Which formula does this calculator use?
Replacement (%) = expected income/prior income × 100.
What should I check before using the result?
Use either gross or net income consistently. No country pension entitlement is calculated.
How are results rounded?
Scalar numbers display up to six decimal places, with scientific notation for very large or small values. Text, fraction, date and schedule outputs use the format described on the tool. Intermediate calculations use JavaScript floating-point arithmetic. Keep sensible precision for your measurements.
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