Monte Carlo Simulator

A Monte Carlo simulation runs your financial plan through thousands of possible futures, randomly varying the market return each year based on realistic assumptions. Instead of a single smooth projection, it produces a range of outcomes and a probability - for example, the share of simulated paths in which your money lasts through retirement. It is a way to see not just the average result but how much the result could vary.

A single average return hides the biggest real-world risk: the order in which good and bad years arrive. Two portfolios with the same average can end very differently if one suffers poor returns early in retirement while withdrawals are being made. By simulating many random sequences, Monte Carlo captures this sequence-of-returns risk and shows the odds of success, which a straight-line projection simply cannot.

Many planners look for a success rate in the region of 85 to 95 percent across the simulations, meaning the plan survived in that share of possible futures. A lower rate signals you may need to save more, spend less, or work a little longer; chasing 100 percent often means over-saving for a scenario that is very unlikely. The right target depends on your flexibility and comfort with risk.

No. The simulation is only as good as its assumptions about returns, volatility, and inflation, and the real future may fall outside the modelled range. It is a powerful tool for understanding risk and comparing plans, not a promise. Use it alongside a margin of safety and periodic reviews, and seek personalised advice for decisions specific to your situation.