Wealth Gap Calculator

Understanding Wealth Gaps

A wealth gap is the difference between two net worth figures, and closing one is simpler arithmetic than it feels. Only one thing narrows a gap: saving more per year, in absolute terms, than whatever you are measuring against. Not saving harder, and not saving a higher share of income. More money. If the reference puts away 30,000 a year and you put away 10,000, the gap grows by 20,000 annually no matter how disciplined either side feels.

Why Most Wealth Gaps Don't Close

The awkward part is that a higher reference net worth usually sits on a higher income, and income is what funds saving. That is why the absolute comparison is the one that counts: a reference saving a smaller share of a much larger income can still out-save you by a wide margin. Wealth is distributed considerably more unevenly than income across most countries, which is the same fact viewed from the other end.

So the calculator returns Not closing whenever your annual saving matches or trails the reference. That is not a failure state, it is the arithmetic, and it is the honest answer to a question the page would otherwise be tempted to soften.

Worked Example for Peer Comparison

A net worth of 100,000 against a reference of 500,000 gives a gap of 400,000. Saving 10,000 a year against the reference's 30,000 puts the savings gap at minus 20,000, and the calculator returns Not closing, because a gap does not narrow while the other side is putting away 20,000 more each year. Left alone, that gap is 600,000 after a decade rather than zero.

What would close it: saving 40,000 a year, which is 10,000 more than the reference, clears 400,000 in 40 years. Saving 50,000 clears it in 20. Closing it inside a decade needs 70,000 a year, 40,000 more than the reference puts away. Those are the figures the arithmetic gives. Whether any of them is reachable is a separate question the calculator does not touch.

What the Calculator Does Not Model

Investment returns on either side, which matter more than they sound: a larger base compounds to a larger absolute gain at the same rate, so returns generally widen an absolute gap rather than close it. Windfalls and inheritances, which move a gap in a single step. A reference whose saving grows faster than yours across a career. Cost of living differences that change what a given income can set aside.

One thing worth watching is that the two figures can move in opposite directions. At the defaults the absolute gap widens from 400,000 to 600,000 over ten years while the ratio improves from 20% to 25%, because a smaller base grows proportionally faster. Both are true at once, which is why the calculator shows the gap and the ratio side by side rather than picking one.

Alternative Paths to Wealth Closure

Inside the arithmetic there is only one lever: the absolute amount saved each year. Anything that closes a real gap works by moving that number, whether through a higher income, a lower cost base, or equity in something appreciating outside the savings line altogether. All of that sits outside what this calculator models, and it has nothing to say about how likely any of it is for a given person.

What it does is turn a vague sense of being behind into a specific annual figure. At the defaults that figure is 70,000 a year to close the gap within a decade, against the 10,000 currently going in. Knowing the number is not the same as reaching it, but it is the point at which the question stops being a feeling and starts being answerable.