💡 What is a Monte Carlo Simulation?

A Monte Carlo simulation is a way to test thousands of possible futures to see how likely your plan is to succeed. Think of it like running the same retirement scenario 10,000 times, but with different market conditions each time—sometimes the market booms early, sometimes it crashes, sometimes it's mediocre. By testing all these possibilities, you get a realistic picture of what could happen instead of relying on a single "average" that may never actually occur.

Imagine flipping a coin 1,000 times to see how often you get heads. A Monte Carlo simulation does the same thing with your retirement portfolio—it runs thousands of "what-if" scenarios to see how often your money lasts.

Instead of assuming the stock market returns exactly 7% every year, this tool recognizes that returns are unpredictable. Some years are up 20%, others down 15%. By simulating thousands of possible futures with random (but realistic) returns, you get a clearer picture of what could actually happen.

🎯 How to Use This Tool

1. Set your starting portfolio and withdrawal rate (how much you'll take out each year as a % of the starting balance).

2. Choose an investment strategy from the dropdown—ranging from conservative bond-heavy portfolios to aggressive growth strategies.

3. Decide on withdrawal type: fixed dollar amounts or inflation-adjusted (increases 2% yearly).

4. Optional: Enable the stress scenario to simulate a market crash in the first 5 years (the worst-case early retirement scenario).

5. Click "Run Simulation" and review your results. The success rate shows how often your portfolio survived. The charts show possible paths your portfolio could take and the range of outcomes.