Monte Carlo Retirement Simulator
Simulate 1,000 portfolio growth scenarios to see the range of outcomes for your savings and contributions.
How this is calculated
Each of the 1,000 simulations picks a random annual return for every year between now and retirement, drawn from a distribution shaped by your stock/bond allocation, then compounds your monthly contributions through that year at 1/12th of the annual rate. The result is a distribution of possible ending portfolio values rather than a single number.
The p10/p50/p90 lines on the chart show a pessimistic, typical, and optimistic outcome at every age along the way — not just at retirement — so you can see how the range of possibilities widens over time as market volatility compounds. For the decumulation side of retirement planning, see the Safe Withdrawal Rate Calculator.
Frequently asked questions
- What is Monte Carlo simulation?
- A technique that runs thousands of randomized scenarios — here, different sequences of annual investment returns — to see the full range of possible outcomes, instead of relying on a single average growth rate that can hide how much results can vary.
- Why run multiple scenarios instead of one projection?
- A single average-return projection makes every year look the same, which is not how markets behave. Running 1,000 scenarios with randomized annual returns shows you the spread of likely outcomes — including the unlucky and lucky tails — not just the middle case.
- What return assumptions are used?
- Stocks: 7% real (inflation-adjusted) mean annual return, 15% standard deviation. Bonds: 1.5% real mean, 6% standard deviation. These are long-run estimates drawn from US market history, blended according to your stock allocation.
- How does asset allocation affect the outcome?
- A higher stock allocation raises the median expected outcome, but also widens the gap between the p10 (unlucky) and p90 (lucky) scenarios. A more conservative allocation narrows that range but usually lowers the median as well.
- Is my starting balance or my monthly contribution more important?
- Over a long horizon, consistent monthly contributions typically outweigh the starting balance, because each contribution compounds for the years remaining after it. Early in the timeline the starting balance dominates; later, cumulative contributions and market growth take over.
- What does the p10 line mean?
- The 10th percentile — in 10% of simulated scenarios, your portfolio ended up at or below this value. It represents a pessimistic (but not worst-case) outcome, useful for stress-testing your plan.
- Does this adjust for inflation?
- The return assumptions are real (already inflation-adjusted) returns, so the dollar figures shown represent purchasing power in today's terms rather than future nominal dollars.
- Can I use this in my own app?
- Yes — every calculator on Stupidly Clever has a matching REST API and MCP tool that runs the same underlying logic.