How it's calculated
A forecast gives one number. A retirement Monte Carlo simulation gives a range: it replays your plan hundreds or thousands of times, each with a different random sequence of yearly returns, and counts how many paths pay for every withdrawal until the end. The result is a probability under your assumptions, not a prediction of what markets will do.
Each simulated year runs in this order:
- Withdraw at the start of the year. The draw is your withdrawal minus other income (both raised by inflation if you choose). In % mode it's that share of the year's starting balance. Money comes out of each asset in proportion to its weight.
- Check for depletion. If the balance can't cover a positive draw, the path fails, the balance is set to zero and it stays at zero — a later good year can't bring it back.
- Grow. Stocks and bonds each get an independent random return drawn from a normal distribution with your mean and volatility (losses capped at −100%). Cash earns its fixed interest.
- Charge fees as one annual percentage of the whole portfolio.
- Rebalance back to your target mix, if switched on.
Balances are then divided by cumulative inflation so every figure is in today's dollars. The random generator is seeded, so the same inputs and seed always produce the same answer — change the seed to see how much the result moves from sampling alone.
FIRE and the withdrawal rate
FIRE (financial independence, retire early) plans usually start from a target portfolio and a sustainable yearly draw. A common rule of thumb divides annual spending by a withdrawal rate such as 4%; a longer retirement typically calls for a lower rate. This tool lets you check a specific rate, horizon and mix instead of relying on the rule of thumb.
Asset allocation
More stocks raise the expected return and the spread of outcomes. Bonds and cash narrow the spread but may not keep up with inflation and withdrawals over 30–40 years. Compare a few mixes and watch both the success rate and the 10th-percentile balance.
Sequence-of-returns risk
Two retirees with the same average return can end very differently. Bad years early, while withdrawals are being taken from a large balance, do lasting damage; the same bad years late matter less. Monte Carlo captures this because every path has its own order of returns — which is why the success rate is often lower than a straight-line projection suggests.
Inflation
With inflation adjustment on, a $40,000 draw becomes about $51,200 in nominal dollars after ten years at 2.5%. Leaving it off models a flat nominal draw, which quietly shrinks in real terms.
Worked example
Defaults: $1,000,000 at 55, 35 years, 60/35/5 stocks/bonds/cash, stocks 7% ± 16%, bonds 4% ± 6%, cash 3%, 0.2% fees, 2.5% inflation, $40,000 a year rising with inflation, 1,000 paths, seed 42. The first-year draw is $40,000 (4%). A sanity check: 100% cash at 0% interest, no inflation, $100,000 and $10,000 a year lasts exactly 10 years — the 11th year fails on every path.
Limitations
- Returns are illustrative, independent normal draws — not historical data. Real markets have fat tails, correlation between assets and regime shifts.
- No taxes, Social Security claiming rules, required minimum distributions, or one-off expenses.
- Surplus income above spending isn't reinvested.
- A % of portfolio withdrawal can't run out by design, so its success rate is not comparable to fixed-dollar plans.
- Planning illustration only — not financial advice or a guarantee of outcomes.
Frequently asked questions
What is a good Monte Carlo success rate for retirement?
There's no universal threshold. Many planners treat roughly 75–90% as a reasonable range, because a plan that never fails often means spending less than you could. The right figure depends on how flexible your spending is.
Is Monte Carlo better than a simple retirement calculator?
It shows the range and the chance of running out instead of one average path, which captures sequence-of-returns risk. It's only as good as the return, volatility and inflation assumptions you enter.
Why does the result change when I change the seed?
Each seed draws a different set of random paths. With 1,000–2,000 simulations the success rate usually moves by a point or two; larger swings mean the plan sits near a tipping point.
Does this calculator use historical returns?
No. It samples returns from the mean and volatility you set. Edit them to reflect your own expectations.
Is my data sent anywhere?
No. The simulation runs in your browser; nothing you type is sent to Intious.
Results are estimates calculated in your browser; nothing you enter is sent anywhere. They aren't payroll, tax or legal advice — your employer's records, policy and applicable law decide actual pay and leave. See our calculation methodology and editorial policy, or report a calculation error.