Monte Carlo Simulation Explained: How Retirement Plans Use Probability

A Monte Carlo simulation runs thousands of hypothetical market scenarios against your retirement plan to calculate a probability of success. Ryan explains what that probability actually means: the percentage of simulated scenarios in which you do not run out of money before the end of your plan. The tool accounts for sequence-of-returns risk, meaning whether a bad market comes early or late in retirement matters a lot.Ryan also tackles the counterintuitive point that a 100% probability score is not the goal. A plan that works in every simulated scenario may mean you are saving far more than you need and shortchanging your life today. Aaron shares that this came up in his own planning meeting, which keeps the conversation grounded. Talk to your financial advisor to understand what probability range makes sense for your specific situation.Find "Your Fiscal Physical" the book on AmazonIf you have suggestions or feedback, please email us at: [email protected], as always, Stay the Course!