Enter your balance, what you add or take out each month, and the return and risk you expect. You get 1,000 possible futures and the range they land in.
Median balance after 20 years
1,000 simulated paths with monthly returns. The paths stay the same between runs, so when you change one input, the difference comes from that change.
The median is the middle path: half of the 1,000 simulations finish above it and half below. The 5th percentile is a bad run of markets, where only one path in twenty does worse. The 95th is the mirror image, a good run that only one path in twenty beats.
The darker band on the chart is where the middle half of the paths sit in each year, and the lighter band holds nine paths in ten. Watch how fast it widens. That spread is the risk a single average return line never shows you.
Read the percentiles as a range to plan around. They come from the return and volatility you entered, so if those change, the whole picture moves with them.
$10,000 to start, $500 added every month, 7% a year at 15% volatility, with a $500,000 goal.
Steady saving carries the early years and the market does most of the work later. Even the 5th percentile ends above the $190,000 you put in.
$1,000,000 to start, $3,500 taken out every month and raised with 2.5% inflation, 7% a year at 12% volatility. Shown in today's money.
The middle case still leaves plenty after 30 years, yet about one path in four runs dry. Those are the paths where bad years come early and the withdrawals keep coming out of a shrinking balance.
Five percent of the simulated paths ended below it. Think of it as a bad run of markets for the return and volatility you entered, though not the worst one possible.
Yes, and you can use both at once. Each month the return is applied first, then the contribution goes in and the withdrawal comes out. Withdrawals can start in a later year.
Each month draws a random return from a lognormal distribution, so a balance can fall but never below zero from returns alone. The draws average out to the yearly return you enter and swing as much as the volatility says.
Losses hurt more than equal gains help: after a 20% drop you need 25% just to get back. So with the same average return, a bumpier portfolio ends lower in the middle case and spreads its outcomes much wider.
A path runs out when a withdrawal is due and the balance can not cover it. The balance is set to zero and stays there for the rest of the horizon. The percentage shown is the share of the 1,000 paths where that happened.
It answers the core retirement question, whether a balance with your contributions and withdrawals lasts or reaches a goal, over up to 40 years. Taxes, fees and pensions are not part of the model.
Here you guess the return and the volatility. In AllInvestView the simulation starts from what you actually hold. Each holding's expected return comes from its market risk, and the spread comes from how your holdings really move together, so five tech stocks and a mix of bonds and world funds get very different ranges.
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AllInvestViewMonte Carlo simulation
Results come from the return and volatility you enter. They are model outcomes, not a forecast or financial advice.