Model retirement savings with Monte Carlo simulations of market returns. Visualize probability of achieving target nest egg.
Saving a fixed amount each year does not produce a fixed nest egg. This tool runs Monte Carlo simulations: it generates thousands of market futures, each with its own randomly drawn yearly returns, compounds your savings through every one, and reports what share of those futures reaches your target. The output is a probability plus a range of possible ending balances, not a single promised number. The thing most users get wrong is trusting the average path: a plan can look fine at 8 percent per year while the lower tail of outcomes falls far short. The order of good and bad years matters as much as the average.
Each run of the model creates a large number of independent hypothetical futures, one per simulation. In every simulated year the portfolio grows by a return drawn at random from a distribution of possible returns, then that year's contribution is added to the balance. Following a single future to retirement produces one ending balance, and the full set of endings is the raw output of the exercise.
Once all futures finish, the tool sorts the ending balances and counts the fraction that reached the target nest egg. That fraction is the reported probability of success. The sorted list also shows how outcomes spread, from poor-market to good-market, so the plan gets a range rather than a single figure. The random draws change on every run, so the percentages move a little each time.
In about seven of every ten simulated futures, the balance reached your target, and in three it fell short. It is a statement about the model's market assumptions, not a guarantee about your real retirement. The percentage is also a sample estimate - run the tool again and it shifts slightly - and it assumes you follow the plan exactly.
The straight line compounds every year at the exact average return, which is the single best-case order of returns. Real markets deliver good and bad years in some sequence, and a bad sequence early, especially once withdrawals start, leaves a much smaller balance even when the average return is identical. The gap between the straight line and the median simulated outcome is the sequence-of-returns risk this tool is for.
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