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Retirement Calculator
Your retirement plan
Runs 1,000 simulated market histories. Each year's return is drawn at random around your expected return, so the result changes a little every time you run it — that spread is the point. Press the button again for a fresh run.
A simulation is an estimate, not a guarantee. Real market returns are not perfectly normal, and future returns may be lower than past ones. Use the range — not just the median — when you plan.
Example: age 30, retiring at 65, $50,000 saved, $500 a month, 7% expected return, 12% volatility → median balance about $1.15–1.21 million, 10th–90th percentile range about $0.59–2.38 million, and roughly a 60–63% chance of reaching $1,000,000. Each run is random, so your numbers will differ slightly.
Behind the numbers
What a Monte Carlo simulation does
A normal retirement calculator assumes the same return every year — 7%, 7%, 7% — which never happens. A Monte Carlo simulation accepts that markets jump around: in each of 1,000 runs it draws every year's return at random from a bell curve centred on your expected return, with your volatility as the spread. Good years and bad years land in a different order each time, so the 1,000 runs produce a spread of final balances. The median is the middle outcome, and the 10th and 90th percentiles show the range most outcomes fall in.
z is a random draw from a standard normal distribution (Box-Muller method). Each year the balance grows by that year's return, then the year's contributions ($500 × 12) are added. With no volatility at all, the same inputs give a single fixed answer: $1,434,356. Volatility pulls the median below that, because losses take more to recover from than gains add.
A few comparisons
Same plan, different average returns (no volatility)
What the example plan ($50,000 saved, $500 a month, 35 years) reaches if the return were the same every year — no market swings at all. The table updates when you change your savings, contribution or ages.
| Average return | Balance at retirement | Median in today's dollars |
|---|---|---|
| 5% a year | $843,847 | $299,895 |
| 7% a year | $1,434,356 | $509,746 |
| 9% a year | $2,491,591 | $885,347 |
Two extra points of return — 7% instead of 5% — add about $590,000 to the final balance. But the simulation above shows the catch: with 12% volatility, the typical outcome lands below the smooth 7% figure, near $1.2 million instead of $1,434,356.
Raise your odds, not just your hopes.
Start early. Every extra year of compounding matters more than a slightly higher return — the same $500 a month from age 25 instead of 30 adds hundreds of thousands by 65.
Raise your contribution a little each year, for example with every pay rise. Even $50 more a month compounds into tens of thousands over 35 years.
Stay invested through market drops. Selling after a crash locks in the loss and misses the recovery — and the simulation shows the recovery is where much of the growth comes from.
Keep fees low and stay diversified. A 1% yearly fee quietly takes a large share of a 35-year balance, and a mix of stocks and bonds smooths the ride without giving up much return.
Good to know
Your questions, answered.
What does Monte Carlo mean in a retirement calculator?
It means running the same retirement plan through many different simulated market histories instead of one smooth average. This calculator runs 1,000 simulations: in each one, every year's return is drawn at random from a normal distribution around your expected return, with your volatility as the spread. The results show the range of outcomes — the median balance, the 10th and 90th percentiles, and the chance of reaching your target — instead of a single number that pretends the market is predictable.
Why does volatility matter if the average return is the same?
Because losses hurt more than gains help. A 20% loss needs a 25% gain just to get back to where you started, so wild swings drag the typical outcome below the smooth average. With a 7% average return and 12% volatility over 35 years, the median balance is about $1.2 million, while the no-volatility result would be $1,434,356. The wider the swings, the wider the gap between the good and bad outcomes.
What is sequence-of-returns risk?
It is the risk that bad market years arrive at the worst time — just before or just after you retire, when your balance is biggest and you start taking money out. Two savers can earn the same average return over 35 years and end up with very different balances if one hits a market crash in the last few years. That is why the 10th-percentile result matters: it shows what happens when the timing works against you.
How can I improve my odds of reaching my retirement target?
Three levers move the odds most: save more each month, start earlier so compounding has more years, and keep investing through market drops instead of selling. On the example plan — age 30, $50,000 saved, $500 a month — raising the contribution to $750 a month lifts the median balance to about $1.5 million and the chance of reaching $1,000,000 to about 79%. Lower fees and a diversified mix of stocks and bonds help too, by keeping more of each year's return.