Odds of success (Monte Carlo)

What it does

Your main forecast assumes a single, steady rate of return every year. But markets don't hand you the same return each year — some years are up 20%, some are down 15%, and the order they arrive in matters. Odds of success (a technique called Monte Carlo) faces that head-on.

It runs about 500 separate projections of your plan. In each one, the app rolls fresh, random investment returns year by year — clustered around the return you expect, but with realistic ups and downs — and also varies how long you live around the life expectancy you entered, because the money has to last as long as you actually do, not until the birthday you typed in. Then it counts how many runs your money lasted the whole plan.

Two details keep the number honest. Your investment accounts rise and fall together, the way a real market moves them — splitting the same savings across more accounts won't improve your odds. And each run is played twice: once with you spending exactly on plan no matter what, and once flexibly — trimming spending about 10% after a bad year and restoring it when markets recover. The panel shows both, because nobody actually spends on plan through a crash; the gap between the two numbers is a spending decision you'd get to make, not a fate.

• "Success" means one thing: your money never runs out before the end of your plan.
• The percentage is simply the share of runs that succeeded. 500 runs, 425 of them never ran out → about 85%.

Cash-like savings barely move in these simulations; investment accounts get the full swing. You'll find this under Stress-test your plan → Odds of success on the Forecast tab. It's a premium feature.

Why it captures "sequence-of-returns" risk

Two retirees can earn the same average return over 30 years and end up in very different places — because the one who hit a bad stretch early, while withdrawing, sold investments at low prices and never fully recovered. That's sequence-of-returns risk (defined in the glossary), and a single steady projection can't show it. Running hundreds of randomized orderings does.

What a low or 0% result means

This is the most important part to understand.

A 0% result almost never means "the simulation is broken." It means your plan already runs out of money in the normal, steady projection — so essentially every randomized run also runs out. When you're spending far more than your income plus savings can support, no amount of good luck in the market rescues it. Better returns help a plan that's close; they can't close a large, permanent gap.

An honest example. Say your income is $3,400/month, you spend $7,000/month, and you have modest savings. That's a $3,600/month shortfall drawn from savings every month. The savings drain quickly, the plan runs out, and so the odds of success come back at roughly 0%. Running more simulations won't change that — the math is the same in every run.

The fix is the plan, not more simulations. To move a 0% (or very low) result, you change the underlying numbers:

• Bring in more income — delay Social Security for a bigger check, work a little longer, add a pension or annuity.
• Spend less — trim expenses, or check your real spending on the Budget tab in case the plan is overstated.
• Both — even small moves on each side add up.

After a change, run the odds again and watch the percentage climb.

How to read the number

There's no official "passing" score, and this is an estimate, not advice. As a rough guide, many planners treat a high probability (say 85–95%+) as comfortable, a middling one as worth shoring up, and a low one as a signal to revisit income or spending. Use it to compare before and after a change — that's where it's most useful.

Below the percentages, the panel translates the simulation into plain sentences: the age by which the worst 1-in-10 runs had already failed, what flexibility is worth, and your income floor — the share of spending that Social Security, pensions and annuities would still cover at 75 even if markets failed entirely. That floor is the bedrock under every probability on the page. Both are explained in Flexible spending and your income floor, including the exact rule the app uses to trim and restore spending.

Next: try the what-if levers to see which single changes move the needle most, or the Roth conversion comparison for the tax side.