The most common retirement question I get is also the most dangerous one to answer with a single number. “Will my money last?” deserves a real answer — but a single average-return projection isn’t it.
Most retirement calculators take your portfolio, your withdrawal rate, and an assumed return, and project a smooth line forward to age 95. If the line stays above zero, the retirement “works.” If it doesn’t, it doesn’t. Clean, simple, and dangerously misleading.
Real markets don’t return 7% every year. They returned −38% in 2008, +28% in 2009, +20% in 2017, −19% in 2022. The order in which the bad years hit matters enormously. A 30-year retirement that averages 7% returns can end with $4 million in the bank or zero in the bank, depending on whether the bad years happen early or late.
A Monte Carlo simulation handles this. Instead of one smooth projection, we run 10,000 versions of your retirement, each with a different random sequence of returns drawn from realistic distributions. The output isn’t “your retirement works” or “your retirement fails” — it’s a probability. In this many scenarios out of 10,000, your money lasted to age 95. In this many, it didn’t.
How to read the result
A 95%+ success probability is excellent. A 70% success probability means you’re betting your last 25 years on a coin that lands 70/30 in your favor — better than even odds, but not the kind of bet I’d make with retirement on the line. Below 50% and you’re hoping rather than planning.
Three levers move that number more than any others:
- Withdrawal rate. Going from 4.5% to 4.0% is rarely something a retiree wants to do, but it’s almost always what shifts a borderline projection into safety. The first 1% of withdrawal you give back is worth more than the next 1% of expected return you chase.
- Equity allocation. Too conservative is a real risk in retirement, not a safe one. A 30/70 stock/bond mix often runs out of growth runway over 30 years and fails Monte Carlo more often than 60/40. The temptation to “de-risk” at 65 is the textbook mistake — you’re not de-risking, you’re trading market risk for inflation risk.
- Time horizon. Plan for a longer life than you think you’ll live. Couples reaching age 65 have an 18% chance one spouse will live to 95. Underestimating longevity is the single most common planning error I see.
What this calculator can’t tell you
A word of honesty: Monte Carlo is one tool, not a complete plan. It assumes a normal distribution of returns when real markets have fatter tails. It doesn’t model Social Security claiming dynamics, RMD-driven tax bills, or IRMAA cliffs that quietly compound your effective marginal rate. It doesn’t know about your healthcare costs, your spending preferences, or whether you’ll move from California to Arizona at 70 and lop 9% off your tax bill in the process.
For households with $500K+ of investable assets, those second-order details are where the real planning value lives. We use Monte Carlo as the foundation and then layer in the tax-coordination, claim-optimization, and asset- location decisions on top. But it always starts with a clear-eyed look at the base case.
What to do with the number
- 95%+: margin of safety. You can probably spend slightly more, retire slightly earlier, or take slightly less risk in the portfolio.
- 70–95%: the band where small adjustments matter. Tightening the withdrawal rate by half a percent, working an extra year, or shifting to a slightly more growth-oriented allocation will usually push you above 90%.
- Below 70%: a planning problem the calculator won’t solve. Time to talk to a fiduciary.
Run yours.