Updated August 2026 — Includes current contribution limits and a practical success-rate framework you can run on your own numbers in minutes.
The Question Every Pre-Retiree Actually Asks
"How much do I need?" is the polite version.
The real question is:
If markets are ugly in the first decade, will my money still last?
A spreadsheet that assumes 7% every year cannot answer that. Real markets deliver strings of bad years, recoveries, inflation spikes, and long stretches that look nothing like the average. Two households with the same average return can finish with very different outcomes if one hits poor returns early while withdrawing.
That early-withdrawal trap is sequence-of-returns risk — and it is the main reason "average return" calculators feel reassuring right up until life is not.
Why a Single Projection Is Not Enough
| Approach | What it assumes | What it misses |
|---|---|---|
| Fixed 6–7% return | Smooth growth forever | Crashes, multi-year droughts, inflation shocks |
| 4% rule only | Historical averages | Your Social Security, pension, taxes, spending flexibility |
| "I have $X, so I'm fine" | Net worth = safety | Withdrawal timing and bad-luck order of returns |
| Monte Carlo check | Thousands of market paths | Nothing magical — but it shows range of outcomes |
A Monte Carlo retirement check runs your plan through many simulated market histories (RetirePro uses 1,000 scenarios on Pro). Each path has different returns. You get a probability of success — how often the plan still funds your spending without running out.
That single percentage is more honest than one pretty line on a chart.
What a "Good" Success Rate Looks Like
There is no universal magic number, but this framework is practical for most 25–35 year retirements:
| Success rate (approx.) | How to read it | Typical next move |
|---|---|---|
| 90%+ | Strong plan under many histories | Fine-tune taxes, Social Security, legacy goals |
| 75–89% | Workable with flexibility | Trim early spending, delay retirement 1–2 years, or raise savings |
| 60–74% | Fragile | Needs a real change — spending, bridge income, or timeline |
| Under 60% | High chance of shortfall | Do not quit on hope; redesign the plan |
Important: a 100% success rate often means you are underspending or oversaving relative to your goals. 85–95% with flexibility is usually healthier than a plan that only "works" if markets are perfect and you never help a kid or fix a roof.
The 10-Minute Monte Carlo Check
You do not need a 40-page financial plan to get a useful answer. You need five honest inputs:
1. Your real spend (not your aspirational budget)
Include property tax, insurance, car replacement, travel, and healthcare — not just groceries and Netflix.
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Social Security (by claiming age), pension, annuity, rental net income. Subtract these before you ask the portfolio to carry everything.
3. Investable assets that will actually be spent
401(k), IRA, brokerage, HSA (for medical), taxable accounts. Exclude the house unless you truly plan to downsize or reverse-mortgage.
4. Timeline
Retirement age, spouse situation, and how long the plan should last (age 90–95 is a safer planning horizon than 85 for many couples).
5. Flexibility rules
What you would cut in a bad market year: travel, gifting, dining. Plans with a "flex layer" survive more scenarios.
Run your free baseline plan in RetirePro →
Enter accounts and goals first. When you are ready for the full 1,000-scenario distribution, percentiles, and risk analysis, unlock Pro on the Results tab.
How to Read the Output (Without Panic)
When you run a serious Monte Carlo check, look for three things — not just the headline percentage:
- Median outcome — the "typical" path. Is lifestyle intact?
- Bad-tail outcome (10th percentile) — what ugly paths look like. Do you still cover essentials?
- When failure happens — early shortfall vs. late-age shortfall require different fixes.
If the rate is lower than you hoped
Fix one lever at a time and re-run:
| Lever | Example change | Who it helps most |
|---|---|---|
| Spending | Cut $500–$1,000/mo discretionary | High lifestyle relative to assets |
| Timeline | Work 12–24 more months | Borderline pre-retirees |
| Claiming | Delay Social Security | Healthy couples with savings bridge |
| Savings | Max catch-up contributions | Ages 50–63 still working |
| Allocation | Right-size cash buffer (1–3 years essentials) | Sequence-risk sensitive retirees |
Re-running after each change is the point. Guessing which lever matters is how people delay retirement by five unnecessary years — or retire into a plan that only works on paper.
Averages That Quietly Ruin Plans
Watch for these false comforts:
- "The market returns 10% historically." Not every decade. Not in order. Not after fees and withdrawals.
- "I'll spend less later." Healthcare and help-at-home costs often rise just as travel falls.
- "We'll claim Social Security early and invest the difference." Sometimes works; often fails the Monte Carlo when markets are weak early.
- "My advisor said we're fine." Ask for the probability, the assumptions, and what happens in a 2008-style start. If there is no distribution of outcomes, you got a story, not a stress test.
Free vs Full Analysis (What You Need)
You can build a complete picture of balances, contributions, and a basic projection for free.
The conversion moment for most people is seeing the distribution — not one line:
- Percentile outcomes (10th / 50th / 90th)
- Portfolio path under stress
- Withdrawal-rate reality check
- Concrete recommendations tied to your gap
That full Monte Carlo layer is what Pro unlocks in RetirePro after your free plan is built.
Do This Before You Give Notice
- Build your plan with real spending and every account.
- Add Social Security estimates at 62 / FRA / 70 (even rough).
- Run the projection and note your baseline success rate.
- Stress one change: retire one year earlier, or spend 10% more. Does the plan break?
- Only then decide on resignation timing, pension elections, or big travel plans.
Quitting work is easy to romanticize on a bull-market statement. A Monte Carlo check is how you replace hope with a probability.