RetirementSimulation.com uses past data to predict how long an investment will last during
retirement. We use
data from the S&P 500, 10 Year Treasury Bond, and 30 Day Treasury Bills, as well as US inflation
data. For each year, we use a random return and inflation amount. This simulation is then
run thousands of times.
The simulation assumes that the future will be at least somewhat like the past. However, we
added features such as a stock market crash and the opportunity to raise and lower returns.
For example, if you modify stock returns up by 1%, the random return for each year will go
up 1% (ie. a 7% return will become 8%).
How to use: Enter your current age and the age when you retire. Then enter your current
savings, the amount that you can save annually before you retire, and the amount that
you plan to withdraw after retirement. Your annual deposits and withdrawals take
inflation into account. For example, if you need $50,000 to live on in retirement using today's
dollars, we will automatically take into account the cost of living for your retirement
years. The same is true for your annual deposits. Next, decide if you'd like to simulate
a stock market crash.
In the portfolio section, choose the makeup of your portfolio with stocks, bonds, and cash.
Cash assumes that your money is stored in a savings account. You can then alter the
future returns and inflation. For example, if the market has historically returned about
10%, but you think the future will be worse, modify the stock returns by -3%, and the
future returns will average out to 7%.
Feel free to contact us.