{"format":"alysly-page/1","url":"https://alysly.com/learn/pension-gap/","json":"https://alysly.com/json/learn/pension-gap/index.json","lang":"en-US","title":"The Pension Gap: Calculating Capital Needs and Withdrawals","description":"How much capital a given retirement budget requires and how long a portfolio lasts with regular withdrawals – with two calculators.","published":"2026-07-13T11:24:42+02:00","modified":"2026-11-01T18:26:04+01:00","alternates":[{"lang":"de-DE","url":"https://alysly.com/de/lernen/rentenluecke/","json":"https://alysly.com/json/de/lernen/rentenluecke/index.json"}],"about":"Machine-readable version of the page at url. It contains the text, tables and key figures published there, but not the interactive charts and tools.","breadcrumb":[{"name":"Investing & Trading Basics","url":"https://alysly.com/learn/"},{"name":"Level 0","url":"https://alysly.com/learn/#level-0"},{"name":"The Pension Gap: Calculating Capital Needs and Withdrawals","url":"https://alysly.com/learn/pension-gap/"}],"content":[{"type":"paragraph","text":"Level 0 Investing & ETF Basics · Part 15/16"},{"type":"heading","level":1,"text":"The Pension Gap: Calculating Capital Needs and Withdrawals"},{"type":"paragraph","text":"By Alexander Bock, founder and data analyst","links":[{"text":"Alexander Bock","href":"https://alysly.com/about/"}]},{"type":"paragraph","text":"Two questions shape the numbers for retirement. Both can be worked through with calculators on Alysly; the results depend heavily on the assumed returns, which nobody knows in advance."},{"type":"image","src":"https://alysly.com/img/ta/capital-by-rate.f04528552b06a9ec18eaeec6c60961e6dc28718d6ad6baa373cc73312d6bb937.webp","alt":"Bars of the capital needed for a 24,000-euro annual withdrawal at withdrawal rates of 3, 3.5, 4 and 5 percent"},{"type":"paragraph","text":"How much capital a €24,000 annual withdrawal requires: €800,000 at a 3% withdrawal rate, about €685,700 at 3.5%, €600,000 at 4%, €480,000 at 5%. The formula is annual spending ÷ withdrawal rate; whether a rate holds up for decades depends on returns and inflation that nobody knows in advance."},{"type":"heading","level":2,"id":"1-how-much-capital-does-a-budget-require","text":"1. How Much Capital Does a Budget Require?"},{"type":"paragraph","text":"The financial-independence (FIRE) calculator derives the capital target from annual spending and a withdrawal rate. The often-quoted 4% rule comes from past US data and is a rule of thumb, not a guarantee.","links":[{"text":"financial-independence (FIRE) calculator","href":"https://alysly.com/tools/fire/"}]},{"type":"heading","level":2,"id":"2-how-long-does-a-portfolio-last","text":"2. How Long Does a Portfolio Last?"},{"type":"paragraph","text":"The withdrawal-plan calculator shows how many years a portfolio lasts at a given monthly withdrawal and return. It also shows whether the income would cover the withdrawal indefinitely.","links":[{"text":"withdrawal-plan calculator","href":"https://alysly.com/tools/entnahme/"}]},{"type":"heading","level":2,"id":"inflation","text":"Inflation"},{"type":"paragraph","text":"A budget stated in today’s money rises with inflation. The inflation calculator shows what an amount is worth decades from now.","links":[{"text":"inflation calculator","href":"https://alysly.com/tools/inflation/"}]},{"type":"heading","level":2,"id":"a-worked-example","text":"A Worked Example"},{"type":"paragraph","text":"Suppose spending needs are €2,500 net a month and the state pension is €1,600 net. The gap is then €900 a month, or €10,800 a year. At a 4% withdrawal rate, that corresponds to €270,000 of capital; at 3%, to €360,000."},{"type":"paragraph","text":"If retirement is still 25 years away, inflation shifts the numbers. At 2% a year, today’s €900 will cost €1,477 by then, and the capital for a 4% withdrawal rises to about €443,000."},{"type":"heading","level":2,"id":"where-the-figures-come-from","text":"Where the Figures Come From"},{"type":"paragraph","text":"In Germany, the statutory pension insurer sends an annual pension statement from age 27, showing the pension earned so far and a projection. The amounts are gross. Health and long-term care contributions and, where applicable, taxes come off before a net figure can be compared with one’s own needs."},{"type":"heading","level":2,"id":"what-the-calculation-leaves-out","text":"What the Calculation Leaves Out"},{"type":"list","ordered":false,"items":["Company and private pensions, rental income or other income that narrows the gap.","Taxes on the pension and on investment income in retirement.","The length of retirement: the longer withdrawals last, the more cautious a sustainable withdrawal rate becomes."]},{"type":"paragraph","text":"Information only, not investment or pension advice."},{"type":"list","ordered":false,"items":[{"text":"Previous Small Cap Value: A Factor Premium With Long Dry Spells","href":"https://alysly.com/learn/small-cap-value/"},{"text":"Next Gold and Inflation: How Reliable the Hedge Really Is","href":"https://alysly.com/learn/gold-and-inflation/"}]},{"type":"heading","level":2,"text":"Indices"},{"type":"table","caption":"Indices, performance over the selected period","columns":["Index","1M"],"rows":[[{"text":"Dow Jones","href":"https://alysly.com/markets/indices/dow-jones/"},{"text":"+1.7%","data":{"m1":"+1.7%","m3":"-1.4%","m6":"+4.5%","ytd":"+7.6%","max":"+30.1%"}}],[{"text":"S&P 500","href":"https://alysly.com/markets/indices/sp500/"},{"text":"-0.9%","data":{"m1":"-0.9%","m3":"+1.2%","m6":"+4.9%","ytd":"+10.8%","max":"+35.8%"}}],[{"text":"MSCI World","href":"https://alysly.com/markets/indices/msci-world/"},{"text":"-0.8%","data":{"m1":"-0.8%","m3":"+0.6%","m6":"+4.0%","ytd":"+10.2%","max":"+35.3%"}}],[{"text":"MSCI ACWI","href":"https://alysly.com/markets/indices/msci-acwi/"},{"text":"-1.7%","data":{"m1":"-1.7%","m3":"-0.2%","m6":"+2.9%","ytd":"+10.3%","max":"+41.7%"}}]]},{"type":"heading","level":2,"text":"ETFs"},{"type":"table","caption":"ETFs, performance over the selected period","columns":["Fund","1M"],"rows":[[{"text":"SPDR S&P 500 ETF Trust SPY","links":[{"text":"SPDR S&P 500 ETF Trust","href":"https://alysly.com/markets/etfs/us/spy/"}]},{"text":"-0.9%","data":{"m1":"-0.9%","m3":"+1.2%","m6":"+4.9%","ytd":"+10.8%","max":"+35.8%"}}],[{"text":"Vanguard S&P 500 ETF VOO","links":[{"text":"Vanguard S&P 500 ETF","href":"https://alysly.com/markets/etfs/us/voo/"}]},{"text":"-0.9%","data":{"m1":"-0.9%","m3":"+1.2%","m6":"+4.9%","ytd":"+10.8%","max":"+34.3%"}}],[{"text":"iShares Core MSCI World UCITS ETF USD (Acc) EUNL","links":[{"text":"iShares Core MSCI World UCITS ETF USD (Acc)","href":"https://alysly.com/markets/etfs/ishares-core-msci-world-ucits-etf-usd-acc/"}]},{"text":"-0.8%","data":{"m1":"-0.8%","m3":"+0.6%","m6":"+4.6%","ytd":"+10.9%","max":"+489.0%"}}],[{"text":"Xtrackers MSCI Emerging Markets UCITS ETF 1c XMME","links":[{"text":"Xtrackers MSCI Emerging Markets UCITS ETF 1c","href":"https://alysly.com/markets/etfs/xtrackers-msci-emerging-markets-ucits-etf-1c/"}]},{"text":"-6.3%","data":{"m1":"-6.3%","m3":"+2.4%","m6":"+0.7%","ytd":"+15.2%","max":"+95.2%"}}]]},{"type":"heading","level":2,"text":"Stocks"},{"type":"table","caption":"Stocks, performance over the selected period","columns":["Stock","1M"],"rows":[[{"text":"NVIDIA Corporation NVDA","links":[{"text":"NVIDIA Corporation","href":"https://alysly.com/markets/stocks/nvidia-corporation/"},{"text":"United States","href":"https://alysly.com/markets/stocks/browse/?country=United%20States"}]},{"text":"-10.4%","data":{"m1":"-10.4%","m3":"+1.9%","m6":"+3.1%","ytd":"+9.7%","max":"+60.6%"}}],[{"text":"Apple Inc. AAPL","links":[{"text":"Apple Inc.","href":"https://alysly.com/markets/stocks/apple-inc/"},{"text":"United States","href":"https://alysly.com/markets/stocks/browse/?country=United%20States"}]},{"text":"+3.5%","data":{"m1":"+3.5%","m3":"+11.6%","m6":"+23.0%","ytd":"+26.8%","max":"+51.4%"}}],[{"text":"Tesla Inc. TSLA","links":[{"text":"Tesla Inc.","href":"https://alysly.com/markets/stocks/tesla-inc/"},{"text":"United States","href":"https://alysly.com/markets/stocks/browse/?country=United%20States"}]},{"text":"+12.7%","data":{"m1":"+12.7%","m3":"+28.5%","m6":"+2.3%","ytd":"-11.1%","max":"+65.9%"}}]]},{"type":"paragraph","text":"Data note 1","href":"#dn-1"},{"type":"heading","level":2,"text":"More Studies"},{"type":"list","ordered":false,"items":[{"text":"Jul 21, 2026 Collectibles ×5.4 for the same cards, matched-model index, Mar 2022 – Aug 2026 Is the Pokémon Card Market in a Bubble? 4,159 Sales Analyzed Prices for PSA-graded cards multiplied. 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The return you assume is a guess, and it can triple the answer.","href":"https://alysly.com/analysis/living-off-returns/"}]},{"type":"paragraph","text":"View all studies","href":"https://alysly.com/analysis/#studies"},{"type":"heading","level":2,"text":"Learn"},{"type":"list","ordered":false,"items":[{"text":"How to Read a Chart Chart types, timeframes, axes – and what a chart always leaves out.","href":"https://alysly.com/learn/reading-a-chart/"},{"text":"Reading Candles: Body, Wick, Color How a candle is built, the body-to-wick ratio – and what gets lost.","href":"https://alysly.com/learn/reading-candles/"}]},{"type":"paragraph","text":"Course overview","href":"https://alysly.com/learn/"},{"type":"paragraph","text":"Updated Nov 1, 2026 · Content and figures checked Nov 1, 2026"},{"type":"heading","level":2,"id":"note-legend-h","text":"Data Notes"},{"type":"paragraph","text":"All calculations run automatically and are not investment advice."},{"type":"list","ordered":true,"items":[{"id":"dn-1","text":"Returns computed automatically from the price series, excluding dividends, taxes and costs."}]},{"type":"paragraph","text":"Data and methodology: Alysly · Responsible for content: Alexander Bock","links":[{"text":"Alysly","href":"https://alysly.com/methodology/"},{"text":"Alexander Bock","href":"https://alysly.com/about/"}]},{"type":"paragraph","text":"View all data notes","href":"https://alysly.com/notes/"}],"structured_data":[{"@context":"https://schema.org","@graph":[{"@type":"Organization","@id":"https://alysly.com/#org","name":"Alysly","url":"https://alysly.com/","logo":{"@type":"ImageObject","url":"https://alysly.com/img/icon-512.png","width":512,"height":512},"description":"Data-driven insights, transparent analysis and powerful tools for long-term investors.","email":"mail@alysly.com","contactPoint":{"@type":"ContactPoint","contactType":"customer 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Not investment advice. All data without guarantee. Financial information is analyzed and presented partly with AI assistance."}