Monte Carlo Retirement Calculator

What a Monte Carlo Retirement Calculator Does

It runs your retirement 500 times through random markets and counts the runs where the money lasts. Each run draws a return for every month from a lognormal distribution around your return, with 15% yearly swings, and pays your withdrawal. A run succeeds if the balance never hits zero before your horizon. The success rate is the share of runs that make it.

The seed is fixed, so the same inputs always give the same odds. This is the Fire Planner's own engine and seed: the planner, this page and the withdrawal calculator agree on the same numbers.

With the defaults, $1,000,000 paying $3,333 a month (a 4% withdrawal) at 5% after inflation lasts 30 years in 394 of 500 runs: 79%. Drop the portfolio to $800,000 at $3,000 a month and it is 69%; $500,000 at $3,000 lasts in 21%.

Why 4% Reads Below the Trinity Study's 95%

The Trinity study found a 4% withdrawal lasted 30 years in roughly 95% of historical periods with a stock-heavy mix, and this page's own backtest agrees: the defaults last in 97% of the 125 periods since 1872. The Monte Carlo line reads lower, 79%, on purpose. Every simulated year swings 15% around your return, monthly draws are independent so a bad decade never has to make itself up, and no run ever cuts spending. History had mean reversion and real retirees adjust; the simulation gives you neither. Treat it as a stress test, not a forecast.

Reading the Fan Chart

The line is the median run: half the runs end above it, half below. The shaded band holds the middle 80% of runs, from the 10th to the 90th percentile. Everything is in today's money. A band that touches zero before your horizon means at least one run in ten runs dry; the worst-10% figure above says how close it comes at the end.

The band widens every year because returns compound. That spread is the point: the same plan can end with twice what you started with or with nothing, depending only on the order the returns arrive.

Monte Carlo vs. the Historical Backtest

Monte Carlo invents markets; the backtest replays real ones. The line under the result runs your withdrawal through every 30-year (or your horizon's) stretch of U.S. stock returns since 1872, from Shiller's S&P 500 data (1871 to today), and names the worst start year.

Each covers the other's blind spot. History has 125 overlapping 30-year periods but only about five that don't overlap, and the future won't repeat them. Monte Carlo has as many paths as you like but none of history's crashes, booms and recoveries. When both say yes, the plan is sturdy. When they disagree, plan for the lower one.

Success Rate Is Not a Grade

85% does not mean a 15% chance of being broke. It means 15% of runs where you never adjusted run dry before the horizon, usually late, after decades of warning. The Fire Planner shows the count, not a grade ("lasts in 394 of 500 simulations"), and suggests a fee-only advisor when a plan lasts in under 60% of its runs.

Chasing 95% or more usually means working years longer for a cushion you never spend. Flexible spending is the cheaper insurance: the rate counts a run as failed even when a 10% cut in a bad decade would have saved it.

Which Calculator Do You Need?

What This Calculator Doesn't Do

One portfolio, one withdrawal, fixed 15% swings and 500 runs. It leaves out taxes, Social Security, spending that changes with age and one-time costs, and you can't change the volatility or run count here. The Fire Planner takes all of that, month by month, with the run count and volatility in its Assumptions. The result button above opens it with your numbers already filled in. Free, no sign-up. No account. The planner runs in your browser and your plan is saved there, not on our servers.