Monte Carlo Retirement Calculator

It's a way to test a retirement plan against many random market paths. Instead of assuming 7% every year, it runs thousands of sequences of good and bad years and counts how often your money lasts. The share that lasts is your success rate. The name comes from Monaco's Monte Carlo district, known for games of chance, because the method relies on random draws.

It's only as good as its inputs and its return assumptions. Tools that draw from a bell curve tend to understate crashes, because real markets have fatter tails. Ours draws from actual past years, which keeps the real mix of bad and good years. Still, the future may differ from 1872 to 2025. Treat 75% or 90% as a sense of risk, not a precise probability.

Many planners aim for 75% to 90%. Below 75% means a real chance of cutting spending late in life. Near 100% usually means you're spending less than you could. Most people adjust spending as they go, so a plan at 80% with a willingness to trim in bad years is often fine. In the example, moving from 76.3% to 90% means spending $39,614 a year instead of $60,000.

Look for one that uses real return history, shows a range of outcomes and not just a success rate, and lets you add income like Social Security. Portfolio Visualizer is popular but has many fields, and some features need a paid plan. Ours opens prefilled with plain inputs, needs no sign-up, runs 10,000 trials in your browser, and keeps advanced settings under More options. It also tells you the spending that hits a 90% success rate.

A few thousand is enough for a stable answer. We run 10,000, so the success rate barely moves if you run it again. The draws are seeded, so the same inputs always give the same result, which makes it easy to compare one change at a time.

With the default historical draws, you don't pick one: returns come from real years for your stock and bond mix. If you switch to the bell curve, enter a return after inflation. 7% with a 15% swing is close to the stock market's long history. 5% is a more cautious stock-heavy assumption, and it drops the example to 36.1%. Lower the average for a portfolio with more bonds.

It's the risk that bad years arrive right when you start withdrawals. Losses early in retirement shrink the balance just as you begin selling, so later gains have less to work with. Under More options, set the worst years first. Forcing the 3 worst years on record into the first 3 years of the example drops its success rate from 76.3% to 17.4%.

It cuts what your savings must cover each year, which raises your odds a lot. Add your expected benefit and claiming age under More options. In the example, $24,000 a year from 67 lifts the success rate from 76.3% to 90.8%. Use your estimate from ssa.gov in today's dollars.

We default to historical draws because real returns aren't normally distributed and include rare crashes. Blocks of 5 to 10 years go further and keep real cycles intact, such as the 1970s. In the example, single years give 76.3%, blocks give 78.0%, and a 7% bell curve with a 15% swing gives 70.4%. Try all three; if they disagree, plan for the lowest.

The 4% rule tests one spending rate against each past start year in order. A Monte Carlo simulation shuffles those years into new sequences, so it can show outcomes worse or better than any single past period. It also covers your saving years, not just retirement. Use our 4% rule calculator to see how your plan held up in each real start year.