Know Your Real Odds of Retirement Success
Run 5,000 different market simulations to see the probability your money will last through retirement. Go beyond simple projections with Monte Carlo analysis.
Start Your Free TrialWhat Is Monte Carlo Simulation?
Monte Carlo simulation runs thousands of different market scenarios based on historical data to show you the range of possible outcomes for your retirement plan.
- Simple projections assume markets grow at a fixed rate every year (they don't)
- Monte Carlo accounts for market volatility, sequence of returns risk, and uncertainty
- See your plan's success rate as a percentage (e.g., 89% chance your money lasts)
- Understand best-case, worst-case, and most-likely outcomes
How Our Monte Carlo Works
We use log-normal distribution modeling to generate thousands of realistic market return scenarios, capturing the natural volatility and uncertainty of real markets.
- 5,000 simulations: Each run uses randomly generated market returns based on historical patterns
- Log-normal returns: Mirrors how real markets behave (with occasional crashes and booms)
- Variable inflation: Each simulation uses different inflation paths, not just a fixed 3%
- Sequence of returns: Captures the risk of bad markets early in retirement
- Percentile analysis: See 10th, 50th, and 90th percentile outcomes
Better Than Simple Projections
A simple projection that assumes 7% annual returns gives you one number. Monte Carlo shows you the full range of possibilities.
- Sequence of returns risk: A market crash right before or after retirement can devastate a plan that looked solid
- Realistic expectations: Understand the range of outcomes, not just an optimistic average
- Stress testing: See how your plan holds up in tough market conditions
- Actionable insights: Know if you need to save more, spend less, or work longer
Frequently Asked Questions
What is a good Monte Carlo success rate?
Most financial planners consider 80-90% a solid success rate. Above 95% may mean you're being too conservative. Below 75% suggests you may need to adjust your plan.
Why 5,000 simulations?
5,000 simulations provide statistically reliable results while keeping computation fast. More simulations wouldn't significantly change the results, and fewer might miss important edge cases.
How is this different from a retirement calculator?
Simple calculators use fixed growth rates (like 7% per year). Monte Carlo uses randomized returns based on historical patterns to show you the range of possibilities, not just one optimistic scenario.
Can I run Monte Carlo on different scenarios?
Yes! You can run Monte Carlo analysis on any of your saved what-if scenarios. See how changes to retirement age, spending, or savings affect your success probability.
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