What does a Monte Carlo FIRE simulator do?

A Monte Carlo FIRE simulator runs many possible retirement return paths to estimate how often a portfolio survives under your spending, inflation, volatility, and time-horizon assumptions.

Why is Monte Carlo useful for FIRE planning?

It helps show how sensitive a FIRE plan is to bad market sequences, not just to average returns. That makes it useful for stress testing withdrawal plans.

What should I change if the success rate looks low?

The most common levers are lowering spending, increasing the starting portfolio, shortening the retirement horizon, or using a more conservative inflation or return assumption.

Monte Carlo FIRE Simulator

Run thousands of possible retirement paths to estimate how often a portfolio survives. This version uses annual return simulations with inflation-adjusted spending, so it is best used as a planning range rather than a precise prediction.

Settings

Portfolio at retirement ?

Monthly spending ?

Years in retirement ?

Expected annual return ? %

Annual volatility ? %

Annual inflation ? %

Simulation runs ?

Withdrawals are modeled monthly. Annual return and volatility assumptions are converted into monthly simulation steps, and spending is inflation-adjusted through time.

What The Simulation Says

Adjust the assumptions to see how success odds move when you change spending, return expectations, volatility, inflation, or retirement length.

Success rate (%) –

Median ending portfolio –

Worst case –

Best case –

Graph With Many Paths

– sampled paths shown Faint blue lines = sampled runs Blue band = 10th to 90th percentile range Green line = median path

Interpretation

Monte Carlo does not try to predict one exact future. Instead, it creates many possible return paths using your expected return, volatility, inflation, spending, and retirement length assumptions. Each run asks the same core question: if returns arrive in a different order, does the portfolio still survive?

That matters because retirement is not only about average return. A plan can look fine on paper with a reasonable long-run average, but still fail if bad returns happen early while withdrawals are already coming out every month. This tool is mainly a way to test how fragile or resilient your plan looks under many different sequences.

The most useful way to read the output is comparatively. If a small cut in spending, a slightly larger starting portfolio, or a shorter horizon moves success odds a lot, that tells you where the pressure points are. So the value here is less about treating one percentage as destiny and more about seeing how sensitive your FIRE plan is when the path gets messy.

Good Next Step

If the result looks weaker than you want, the next step is usually to open a more targeted tool based on what you want to change.

Monte Carlo FIRE FAQ

What does this Monte Carlo FIRE calculator actually test?

It tests how often a retirement portfolio survives when returns arrive in many different possible sequences. Instead of assuming one clean path, it runs thousands of paths using your portfolio, monthly spending, inflation, volatility, and time horizon.

Is Monte Carlo better than a normal FIRE calculator?

It answers a different question. A standard FIRE Calculator is useful for a simple projection, while Monte Carlo is better for stress testing how fragile or resilient that same plan looks when returns get messy.

What should I compare this with next?

If you want to turn spending into a rough target, use the 4% Rule Calculator. If you want to isolate return order without randomness, use the Sequence of Returns Risk Calculator.