Retirement Monte Carlo Simulator

One average return tells you almost nothing. A Monte Carlo simulation tests your plan against 2,000 different market lifetimes and answers the only question that matters: how often does every year of your plan stay funded?

Most retirement math quietly assumes your investments earn the same tidy percentage every single year. Real markets never do that. They crash the year you retire, boom a decade later, and deliver inflation in uneven bursts. A Monte Carlo simulation drops that fantasy: it runs your exact plan — your spending, your accounts, your Social Security and taxes — through 2,000 different sequences of real market history, then counts how many of those lifetimes cover every year of your spending. That count, expressed as a percentage, is your probability of success.

What a success rate really means

An 85% success rate does not mean you'll end up with 85% of your money. It means that in 85 of every 100 simulated market lifetimes, your plan funded your spending all the way through — and in the other 15 it ran short before the end. It's a batting average against history, not a guarantee. That framing matters, because it reframes retirement from a single yes/no answer into a margin of safety you can widen or narrow on purpose: spend a little less, work one more year, or claim Social Security later, and watch the odds move.

Why the average is the dangerous number

The reason averages mislead is sequence-of-returns risk. Two retirees can earn the identical average return over 30 years and end up in completely different places — if one of them hit a savage bear market in the first few years, while they were selling shares to cover living expenses, they may never recover, because there were fewer shares left to ride the rebound. The order of the returns, not just their average, decides who falls short. Monte Carlo is the only common tool that actually surfaces this risk, because it looks at the whole path, year by year, instead of collapsing it into one number.

What is a good Monte Carlo score for retirement?

There is no universal pass mark, but there is a ladder, and this simulator applies one: 90% and above is read as a strong margin of safety, 80–89% as solid, 70–79% as moderate risk, 50–69% as needing adjustments, and below 50% as significant risk. Those bands are what colour the headline figure, so the number you get back is already interpreted.

Two things stop the ladder from being a score to chase. A perfect 100% is not the goal: a plan that survives every simulated lifetime is usually a plan that under-spends by a wide margin, insuring against market histories that have never happened at the price of money and years you could have used. And the figure carries a margin — with 2,000 trials, the 95% interval printed beneath it runs to roughly two percentage points either way, so 88% and 90% are the same answer wearing different digits. Move your plan by a band, not by a point. The guide’s section on reading a success rate covers what the number counts and what a common target looks like.

The sample below is deliberately a tight plan: it lands near a coin flip, exactly the situation where the simulator earns its keep, showing you which small changes push the odds back up a band. retireclarity runs 2,000 trials over about a century of market history, so your plan is tested against real booms, busts, and inflation rather than a single guess.

Want the deeper background first? Read how Monte Carlo retirement simulation works. Or jump straight to the full Monte Carlo simulator.