This advanced calculator uses
MonteCarlo method to give an estimate of what happens to your investments in
the future. During income years people usually more aggressive in their
investments and allocate part of their portfolio to stocks. But stock prices
fluctuate. This fluctuation is measured by Volatility. Use default value if
unsure of the volatility of your portfolio. By investing all of your money in
bonds you can reduce volatility considerable since bond prices (of high ratings
and long maturity) fluctuate less although they also depend on the current
interest rate. MonteCarlo method generates 1000 of different possible
scenarios of how your growth rate will behave in the future and for each such
scenario gives an estimate if your saving will cover your retirement years.
Clearly withdrawals reflect how much money you plan to spend during your
retirement each year. To estimate that amount you can use our Inflation
calculator and do research on the cost of living for people of the retirement
age.
