Here’s a simple budget tool that you can apply all over the place. The first thing you need to do is measure your gap. The math is dead simple: subtract expenses from your income and the difference is your Gap.

For example, if your income is $50k a year and your expenses are $65k then your Gap is $15k. Easy peasy.

The Gap rules everything in retirement planning. Closing the Gap is job one in any successful retirement. As should be pretty obvious, you close the Gap using one or two ways: increase income or reduce expenses.

Be sure to count all your anticipated regular income: social security payments, 401k withdrawals, annuity or pension payments – all of it. If you’re lucky that complete number will exceed your expenses and your Gap will be in the green.

If your income still leaves a Gap to cover expenses, and assuming you don’t have liquid assets like stocks or bonds to make up the difference, that’s when you need to think about other ways to increase income: side hustles, keeping your 401k in higher yield funds, reverse mortgages, or even delaying the age you choose to receive social security payments (it goes up a lot around 70).

Of course reducing expenses is always an option. Just don’t try and cut from non-discretionary spending like debt payments, taxes, or insurance premiums. I’d also say cutting lifestyle spending isn’t a great idea; you’ll just be miserable and likely cheat in other ways and get yourself in trouble. For some there’s also the option of moving somewhere with lower living expenses. I hear good things about niche.com. It’s a site that let’s you research places to live based on the qualities and amenities that matter most to you.

Know that your Gap will change over time, too. Early in retirement prices will go up (thanks, inflation) but so will your social security.

Later in life, if you or your partner need Long Term Care then your Gap would change a lot. Your income may not change (unless you get LTC insurance which is costly) but your expenses will shoot way up. This is definitely a Gap you want to plan for. A lot of people I know look to that point as time to sell the house. But, if you’re a couple, timing may not work out. And, even if timing is right for you, it may not be the best time to sell.

So prepare, prepare, prepare!