📊Monte Carlo Retirement Calculator

Superannuation and Market Volatility

For Australians, the 'account-based pension' is the primary retirement vehicle. Because your Super is invested in the markets (ASX/Global), a bad sequence of returns early in retirement can be devastating. Monte Carlo simulations help you see the range of outcomes for your Super balance, allowing you to adjust your 'minimum drawdown' strategy. ASIC Moneysmart recommends this type of stress-testing to avoid running out of funds before age 90.

ASIC Moneysmart – Superannuation

Layering the Age Pension Safety Net

The Australian Age Pension acts as a stabilizer. If your private wealth drops, your government support often increases due to the 'Assets Test' rules from Services Australia. When running your simulation, our tool automatically calculates potential Age Pension income when your assets fall below certain thresholds. This often shows that Australians have a higher 'survival rate' than they realize, thanks to this unique integrated system.

Services Australia – Age Pension

Australian Life Expectancy and Duration

Data from the AIHW shows that Australians are living longer than ever. A 65-year-old today should plan for a 30-year retirement. Our Monte Carlo tool uses these longevity tables to ensure your simulation runs long enough. Planning for age 95 or 100 is now the standard for Australian retirees to ensure they don't outlive their money in a high-cost environment like Sydney or Melbourne.

AIHW – Life Expectancy Data

Why use Monte Carlo instead of a linear calculator?

Linear calculators assume a steady 7% return every year, which never happens. Monte Carlo accounts for the 'ups and downs' of the ASX and global markets. In Australia, where many retirees have high equity exposure in their Super, this variability is the biggest risk to your lifestyle. A Monte Carlo simulation identifies the 'worst-case' paths so you can build a more resilient plan.

What is a 'Safe' success rate for an Aussie retiree?

Financial planners in Australia often look for a 90% probability of success. If your rate is lower, you might consider working part-time ('Barista FIRE'), reducing discretionary spending, or downsizing the family home earlier. This tool helps you find the right balance between enjoying your wealth today and ensuring security for your future self in Australia.

How do franking credits affect my simulation?

Franking credits can add a significant boost to the 'cash flow' of an Australian retiree's portfolio. Our simulation considers the total return of the ASX 200, which includes the impact of these credits. This often results in a higher probability of success for portfolios with a domestic 'home bias' compared to standard global simulations that don't account for Australia's unique tax system.