Financial Calculators
These calculators are in beta. Please report issues or questions by contacting us.
| To solve this problem... | Use this calculator |
|---|---|
| To see charts of the expected value of a SAVINGS portfolio, given growth rates and stdev | Portfolio Wealth Simulator |
| To see charts of the expected value of a RETIREMENT portfolio, given growth rates, stdev, and FIXED withdrawal rate | Portfolio Wealth Simulator |
| To see a heatmap of safe withdrawal rates vs retirement duration for a fixed withdrawal rate | Safe Withdrawal Rate Calculator - Sweep SWR/Years |
| To see charts of the expected value of a RETIREMENT portfolio, given growth rates, stdev, and VARIABLE withdrawal rate | Safe Withdrawal Rate Calculator |
Methodology & Assumptions
At AlgorithmicFIRE, we prioritize data-driven analysis over "rules of thumb". Our tools use real dollars and Monte Carlo simulations to model the uncertainty of the future.
Understanding "Real Dollars"
All simulations on this site are conducted in Real Dollars (inflation-adjusted). This is critical for long-term planning.
- 0% Return: Your money simply matches inflation (purchasing power remains constant).
- Positive Return: Your money grows faster than inflation.
Monte Carlo Simulations
We do not use simple average returns. We use random sampling from statistical distributions (Normal or Historical bootstrap depending on the tool) to generate thousands of possible futures. This reveals the "Sequence of Returns" risk—the danger that a few bad years early in retirement can deplete your portfolio, even if the long-term average is positive.
Portfolio Wealth Simulator
Detailed Instructions ⓘRelated post(s):
Why use this? To understand the range of possible future portfolio outcomes ("cone of uncertainty") due to market volatility and the specific order of investment returns. It demonstrates how "unlucky" timing (early losses) can severely impact a portfolio even if the average return is good. (Note: Simulations use inflation-adjusted "Real Dollars")
Safe Withdrawal Rate Calculator - Sweep SWR/Years
Detailed Instructions ⓘRelated post(s): Understanding Safe Withdrawal Rate
Why use this? To visualize the probability of portfolio survival across a wide range of withdrawal rates and retirement durations simultaneously. It helps you identify a "safe" rate for your specific time horizon and risk tolerance. (Note: Simulations use inflation-adjusted "Real Dollars")
Safe Withdrawal Rate Calculator
Detailed Instructions ⓘRelated post(s): The 4% Rule Is Dead, Here's What's Replaced It
Why use this? To simulate and compare advanced withdrawal strategies like Variable Withdrawal Strategies (VWS) against rigid Fixed Withdrawal strategies. It allows testing of "guardrails" (caps and floors) to see how they stabilize income and preserve capital. (Note: Simulations use inflation-adjusted "Real Dollars")
Simulate portfolio balance trajectories and withdrawal amounts for a withdrawal strategy. Hints are shown for appropriate values for each of a Fixed Withdrawal Strategy (FWS), Proportional Withdrawal Strategy (PPS), and Variable Withdrawal Strategy (VWS).
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