Monte Carlo simulations reveal a 30% chance your retirement savings run out
Monte-Carlo Simulations
Monte Carlo methods use randomness to solve problems, from estimating pi to analyzing the game of SET. A retirement simulation with one million scenarios shows that a $1M portfolio drawing $30k yearly has a 40% chance of depletion within 30 years—far riskier than average-return estimates suggest.
Assuming that a 65-y.o. person would plan for 25 years of retirement until death, the ~30% odds of not having sufficient funds for this duration of time are sobering.