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Monte Carlo Retirement Calculator

Download the FREE Retirement Calculator

Requires Java Runtime Environment

Step-by-Step Instructions

Frequently Asked Questions

The free Monte Carlo Retirement Calculator lets you explore your financial future including best and worst case scenarios. Most retirement calculators only show you the expected case, but the timing of investment returns can change your situation significantly. Example...

AICPA Version

A version with graphing and exporting functions is available through the American Institute of Certified Public Accountants (AICPA). For more details please click here.

How does it work?

This Monte Carlo Retirement Calculator projects your income, expenses, assets and liabilities into the future. Income and expenses are projected to increase at a fixed inflation rate and liabilities are projected to decrease as you pay off the balances.

"Retirement is like a vacation in Las Vegas. The goal is to enjoy it the fullest, but not so fully that you run out of money."
-- J. Clements

Assets are projected forward by randomly selecting a year between 1974 and 2004 and assuming that the asset generates a return equal to that year's return. This process is repeated until we reach the specified number of years for the projection. We repeat this process multiple times to map out the range of possible outcomes.

In effect we are using a random sampling of historical returns to simulate future returns. While this approach has merit, it is always possible for the market to change fundamentally so that historical returns have no implications for future returns.