What a Monte Carlo retirement projection tells you
Why thousands of scenarios beat a single confident-looking retirement number.
The simple version
A Monte Carlo projection runs many possible futures instead of one neat line. Each run changes assumptions such as market returns, inflation and sequence of returns.
The result is not a promise. It is a way to understand how often a retirement plan might work under different conditions.
Why it matters
Retirement decisions are sensitive to timing. A poor early sequence of returns can matter more than a long-run average suggests.
That is why confidence ranges can be more useful than a single retirement age or pot value.
How RetirementView fits
The website can explain the modelling idea. RetirementView is planned for the personal decision: can I retire how I want, what can I spend, and how confident is the plan?
Frequently asked questions
What is a Monte Carlo retirement projection?
It is a way of testing a retirement plan by running many possible futures rather than one. Each run randomly varies assumptions such as investment returns, inflation and the order in which good and bad years arrive. The output is a range of outcomes and a probability that your plan succeeds, which is more honest than a single confident-looking number that assumes everything goes to plan.
What does a 90% success rate mean in retirement planning?
It means that in 90% of the simulated scenarios your money lasted as long as you needed it to, and in 10% it ran short. It is a measure of confidence, not a guarantee. A higher percentage means more resilience to bad markets or higher inflation, while a lower percentage is a signal to save more, spend less, work a little longer, or revisit your assumptions.
Why is sequence of returns risk important?
Because timing matters as much as averages once you start drawing an income. A run of poor returns in the first few years of retirement, while you are also withdrawing money, can permanently damage a pot even if the long-run average return is fine. Monte Carlo modelling captures this by testing many different orderings of returns, not just the average.
Is a Monte Carlo projection better than a simple retirement calculator?
For understanding risk, yes. A simple calculator assumes one fixed return every year and produces a single tidy figure that can look more certain than reality. A Monte Carlo projection shows a spread of outcomes and how likely each is, which helps you plan for the futures where things go less well rather than only the one where they go to plan.