This online Monte Carlo simulation tool provides a means to test long term expected portfolio growth and portfolio survival based on withdrawals, e.g., testing whether the portfolio can sustain the planned withdrawals required for retirement or by an endowment fund. The following simulation models are supported for portfolio returns:
You can choose from several different withdrawal models including:
To simulate multiple stages such as career and retirement with detailed cashflow goals use the Financial Goals planning tool.
Monte Carlo simulation results for 10000 portfolios with $1,000,000 initial portfolio balance using available historical returns data from Jan 1972 to Dec 2017. The historical return for the selected portfolio for this period was 10.21% mean return (9.64% CAGR) with 9.93% standard deviation of annual returns. The simulation results are based on generated nominal returns and specified inflation adjusted withdrawals ($45,000 per year). The simulated inflation model used historical inflation with 3.98% mean and 1.32% standard deviation based on the Consumer Price Index (CPI-U) data from Jan 1972 to Dec 2017. The generated inflation samples were correlated with simulated asset returns based on historical correlations. The simulation time period was constrained by the available history for US Stock Market [Jan 1972 - Mar 2018].
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|US Stock Market||60.00%|
|Save portfolio »|
|10th Percentile||25th Percentile||50th Percentile||75th Percentile||90th Percentile|
|Time Weighted Rate of Return||7.09%||8.32%||9.73%||11.07%||12.35%|
|Portfolio End Balance (nominal)||$30,889||$2,097,571||$5,384,182||$10,163,439||$16,349,806|
|Portfolio End Balance (inflation adjusted)||$7,613||$629,258||$1,682,760||$3,263,221||$5,424,843|
|Maximum Drawdown Excluding Cashflows||-30.82%||-25.31%||-21.80%||-19.36%||-15.83%|
|9011 portfolios out of 10000 simulated portfolios (90.11%) survived all withdrawals.|
|Name||US Stock Market||10-year Treasury||Inflation||Expected Annual Return||Annualized Volatility|
|US Stock Market||1.00||0.06||-0.08||11.72%||15.37%|
|Asset correlations and return vs. risk statistics are based on monthly returns from Jan 1972 to Dec 2017|