How This Calculator Works
This retirement calculator combines deterministic portfolio projection with Monte Carlo simulation to answer a single question: will you have enough money to last through retirement? It starts by projecting your current savings forward at a 7% average annual return, adding your monthly contributions (adjusted for 2% annual raises), until you reach your target retirement age.
The Monte Carlo engine runs 1,000 simulated retirement scenarios using a log-normal distribution of stock and bond returns calibrated to historical data (7% mean equity return, 20.5% standard deviation; 2.3% mean bond return, 5.7% standard deviation). A 60/40 stock/bond allocation is assumed. Each simulation models 30 years of withdrawals, and the success rate represents the percentage of simulations where your portfolio survives the full 30 years.
Social Security benefits are estimated using the PIA formula with 2026 bend points, adjusted for early (age 62) or delayed (age 70) claiming. The three withdrawal rate scenarios use published research: Bengen's original 4% rule, Morningstar's updated 3.9% conservative rate, and Bengen's 2024 diversified portfolio rate of 4.7%.
Example Scenario
A 35-year-old with $50,000 saved, contributing $800 per month, wanting to retire at 65 with $5,000/month in today's dollars and earning $85,000 per year. The calculator projects their portfolio will grow to approximately $1.02 million by age 65. At a 4% withdrawal rate, they need about $1.08 million (factoring in a $1,800/month Social Security benefit at 67).
The result shows a roughly $60,000 gap and a Monte Carlo success rate of around 68%. The verdict: "Close." The three levers then show that working 2 extra years closes $180,000 of the gap, adding $200/month in contributions closes $95,000, and reducing monthly spending by $500 drops the required savings by $150,000. Any combination of these moves pushes the success rate above 80%.
The worst-case stress test models a 2000-2009 style market crash in the first decade of retirement, showing whether the portfolio survives sequence-of-returns risk or depletes early.
When to Use This Tool
Run this calculator any time you want a gut-check on your retirement trajectory. It is especially useful after major life changes: a salary increase, a new savings commitment, a change in expected retirement age, or a market drawdown that reduced your portfolio balance. The interactive levers let you explore trade-offs in real time without guessing.
This tool is also valuable for couples. Run separate scenarios for each partner and then a combined scenario to see how dual incomes, dual Social Security benefits, and shared expenses change the math. The shareable link lets you save and compare different configurations.
Frequently Asked Questions
What does the Monte Carlo success rate actually mean?
The success rate is the percentage of 1,000 simulated retirement outcomes where your portfolio still has money left after 30 years of withdrawals. A 75% success rate means that in 750 out of 1,000 randomly generated market return sequences, your savings lasted the full retirement period. Financial planners typically target 80% to 90% as a comfortable level. Below 50% means you are more likely to run out of money than not.
Is the 4% rule still valid?
The 4% rule, introduced by William Bengen in 1994, was based on historical U.S. stock and bond returns. Morningstar's December 2025 update lowered the safe withdrawal rate to 3.9% for a 90% success probability over 30 years. Bengen himself updated his number to 4.7% for diversified portfolios in 2024. This calculator lets you compare all three rates so you can choose the level of conservatism that matches your risk tolerance.
How accurate is the Social Security estimate?
The estimate uses the PIA (Primary Insurance Amount) formula with 2026 bend points and adjusts for early or delayed claiming. It is a reasonable approximation based on your current income but does not account for your full 35-year earnings history, which the SSA uses for official calculations. For a precise estimate, create an account at ssa.gov and check your personalized statement. Use this tool's estimate as a planning baseline, not a guarantee.
What is sequence-of-returns risk?
Sequence risk is the danger of experiencing poor market returns in the early years of retirement, when your portfolio is at its largest and you are withdrawing from it. A 30% drawdown in year 1 of retirement is far more damaging than one in year 20 because you are selling shares at depressed prices to fund withdrawals, permanently reducing the base that compounds. The stress test in this calculator models a worst-case first-decade scenario so you can see whether your plan survives it.
Does this calculator account for inflation?
Your desired monthly spending is entered in today's dollars. The 7% return assumption is a nominal return that includes historical inflation. For a more conservative analysis, you could think of it as roughly 4% to 5% real return after inflation. The contribution growth rate of 2% per year approximates typical salary increases that keep pace with inflation. Social Security benefits are also inflation-adjusted in practice through COLA increases, though the estimate here uses current dollars.