• Modelers

Retirement Gap Modeler

Nonprofit entities face a challenge when attempting to provide programs that will allow their employees across all income levels to accumulate sufficient assets for retirement. Qualified plans – 403(b) and 457(b) – have contribution maximums that limit the value of these plans as compensation levels increase, and 457(b) plan balances are subject to creditor risk. Deferred Compensation plans, a common vehicle in Fortune 1000 companies that allow Executives to contribute significant additional dollars on a pretax basis, are not available in the nonprofit environment. The related programs, 457(f) plans, have significant limitations that have made these plans unattractive to most participants.

The Retirement Gap Modeler is a simple-to-use tool that demonstrates how qualified plans [403(b), 457(b)] and Social Security fulfill a smaller and smaller percentage of retirement needs as income levels rise. Projected retirement income replacement ratios for 5 income levels ($50,000, $100,000, $250,000, $500,000 and $750,000) are calculated and presented side by side on a single graph. These ratios are calculated based upon a few simple inputs from the user: age, annual target savings as a percentage of pay, target retirement income as a percentage of final pay, and the expected rate of return on account balances.

We have put together two short videos that demonstrate the use of the Retirement Gap Modeler. Click on the following links to see the video:


Provides an overview of how the Modeler works, including the inputs necessary in order to generate outcomes.


Introduces the detail exhibit, which provides year by year calculations that support the summary graphics on the input screen.

The purpose of the Retirement Gap Modeler is to show how much retirement income can be generated by Social Security and by Qualified Plans offered by companies and how those income levels are less sufficient at higher compensation levels than at lower compensation levels.