📊Monte Carlo Retirement Calculator
Simulate retirement outcomes with market volatility analysis
About this data
- Each run draws a new annual return from a normal (bell-curve) distribution using the mean return and volatility you enter — one pair before retirement, a more conservative pair after. Years are independent: no fat tails, mean reversion or sequence adjustments are modelled.
- Spending grows at your inflation rate from the year you retire. Social Security and pension income are treated as fixed amounts. Each year applies returns first, then the withdrawal.
- A run fails the moment the portfolio reaches zero before your plan-until age; the success rate is the share of runs that never fail. Taxes, fees and asset-class detail are not modelled. Defaults: 7% / 15% before retirement, 5% / 10% after, 2.5% inflation, 10,000 runs.
Model and defaults last updated:
Source: lifebynumbers.net Monte Carlo retirement simulator, 2025-11-29.
What is Monte Carlo Simulation?
Monte Carlo is a statistical technique that runs thousands of different scenarios with random market returns to estimate the probability of your money lasting through retirement. Unlike simple calculators that assume fixed returns, it captures the real uncertainty of financial markets.
Interpreting Success Rate
A 90%+ success rate means in 90% of simulated scenarios, your money lasted through retirement. 75-89% is acceptable but may need adjustments. Below 75% strongly suggests rethinking your plan - save more, spend less, or work longer.
Understanding Volatility
Volatility measures how much returns can vary. A 15% volatility means returns can typically vary ±15% from expected. Higher volatility means more uncertainty. Pre-retirement portfolio can tolerate more volatility; post-retirement generally benefits from a more conservative portfolio.
4% Rule and Withdrawal Rate
The 4% rule suggests withdrawing 4% of your portfolio in year one (adjusting for inflation after) would historically last 30 years. The implied withdrawal rate shows how much you're planning to withdraw. Rates above 4-5% significantly increase the risk of running out of money.
Financial Accuracy
Disclaimer: This calculator provides estimates for informational purposes only. This is not financial, tax, or legal advice. Please consult a qualified financial advisor for advice specific to your situation.