Methodology & Assumptions
Every calculator on this site is an educational estimate built from the assumptions you provide. This page explains how each tool works, where the numbers come from, and where the limits are — so you can judge what the outputs mean.
Overview
All tools follow the same principle: you enter assumptions, we do the arithmetic and present the results as scenarios, not predictions. The single most important thing to understand is that outputs change with inputs — a plan built on a 5% return looks very different from one built on 10%.
FIRE target calculator
You enter annual expenses, and the calculator estimates the corpus you need. It works with the classic heuristics — such as the 25x expenses / 4% withdrawal rule — and shows targets for different styles: a Lean FIRE (minimal spending), a standard FIRE, a Fat FIRE (a higher, more comfortable budget) and a Coast FIRE (where compounding alone carries you to retirement). It also projects a savings timeline from your current portfolio and monthly contributions, using your chosen growth rate.
Yearly projection
The projection builds a year-by-year model of your portfolio. Each asset class compounds at its own expected return, and contributions are added over time — including systematic investment plan (SIP) style monthly additions. Projections can be shown in nominal terms or adjusted for your chosen inflation rate, so you can see what the future portfolio is worth in today's money.
Monte Carlo simulator
Instead of drawing one straight line, the Monte Carlo simulator runs your plan across many random return sequences generated from an expected return and volatility you provide. Each run produces one possible retirement path. The results are reported as percentiles (for example, the 5th, 50th and 95th percentile ending balances) and as a success probability — the share of runs in which the portfolio survives to the end of the horizon. It is a stress test, not a forecast. Inflation is sampled each year with 1.5% annual volatility and compounded into a running price index, so spending is indexed rather than re-randomised every year. The simulation is seeded from your inputs, so the same inputs reproduce the same success rate.
One detail worth knowing: the return you enter is treated as the long-run average your money compounds at, not as the average of a single year's returns. Returns are drawn from a lognormal distribution calibrated so the middle path grows at exactly the rate you entered. That matters because a naive model which simply averaged one-year returns would quietly drift below it — a 7% return with 15% volatility would compound at closer to 6%. The volatility input still means what it says: the standard deviation of one-year returns.
Sequence of returns calculator
This tool holds the average return constant but varies the order of gains and losses, then shows the resulting balance paths. It highlights sequence-of-returns risk: a portfolio that loses money in its first years while withdrawals continue can fail even when the long-run average looks fine. Comparing the paths makes the impact of an early downturn visible.
Bucket strategy calculator
You split the portfolio into cash, income and growth buckets with rules for their size and how spending draws from them. The calculator models spending over time, including the logic of refilling the cash and income buckets from growth when markets allow. It then compares the bucket approach against a conventional single-pool withdrawal plan, and applies a stochastic stress test to both so you can see how each copes with uncertain returns.
Shared assumptions
Inflation, expected returns and withdrawal amounts are user inputs on this site. Expected returns are treated as net of fees: there is no separate fee field, so if your funds cost 0.5% a year, enter a return that is 0.5% lower. There are no hidden defaults pretending to be facts. That means two people entering different assumptions get different answers — which is exactly the point. Always check the assumptions behind any result you rely on.
Limitations
None of these tools can guarantee outcomes. Real markets can fall outside every simulation; taxes, regulatory changes, healthcare costs and life events are not modeled; and the heuristics behind tools like the 4% rule come from historical data that may not repeat. Results are scenarios to learn from, not assurances.
Inputs and formulas may be adjusted over time as the models improve, and this page will be updated accordingly.
Educational estimates only. The math on this page describes how the tools work, not what will happen to your money. For decisions that matter, consider a qualified professional advisor.
Frequently Asked Questions
What rate of return should I use?
That is your call, and it is the assumption that moves results the most. A reasonable starting point is something below the long-run historical average for a broadly diversified portfolio, after inflation and fees. Try several rates and see how much your plan depends on the choice.
Is the 4% rule a guarantee?
No. The 25x expenses / 4% withdrawal heuristic comes from historical US data and is a planning rule of thumb, not a law of finance. Real outcomes depend on returns, inflation, fees, taxes and the order of returns. Treat it as a starting point, not a promise.
Why did my Monte Carlo result change?
Monte Carlo runs use random number sequences, so each run produces a different set of simulated markets. That is why results are reported as a range of percentiles and a probability of success rather than a single number. Small input changes can also shift outcomes noticeably.
How is the bucket strategy modeled?
You allocate the portfolio into cash, income and growth buckets with configured rules for how much each holds and how it is refilled from growth. The calculator simulates spending over time and compares the result against a conventional single pool — including a stochastic stress test.
Are these formulas standardized?
The underlying math follows widely used approaches — compound growth projections, Monte Carlo sampling, safe-withdrawal heuristics and bucket allocation rules. But every tool implements choices about assumptions and edge cases, so outputs can differ slightly from other calculators.