Introduction
Every figure on this page comes from one invented sample household. It was run through the calculator on with 500 simulated futures and the same random seed (seed 42) at every step. It is not your plan and says nothing about your situation.
This guide shows what each setting in the calculator does. It starts with a household that has only the basics filled in and changes one thing at a time. Each step shows the reading before, the reading after, and what stayed the same.
It does not say which setting to use. A step is not an improvement on the one before it.
The household
A single person who stops working at 55 and bridges to Social Security from taxable savings.
When a market fall comes matters in this model
Stock return 6.0875 percent, bond return 3.7812 percent and cash return 3.0125 percent a year, before inflation; inflation 2.5 percent; yearly spending $68,000; end year 2069.
In this model, money withdrawn while balances are down is not there to grow when returns recover, so a fall in an early year, with many withdrawal years after it, lowers the ending balance more than the same fall in a later year. That is the arithmetic of the method, applied to the figures below.
Here is the example household above, run twice with one change. In the first run the stock return for the first year of retirement is set to -9.1 percent instead of the 6.0875 percent assumed for every other year; in the second run the same one-year return is placed in the tenth year instead. Every other input is identical, and the arithmetic average of the yearly returns over the plan is the same in both runs.
Fall in year 1: ending net worth $239,000, money lasts to the end year. Fall in year 10: ending net worth $373,000, money lasts to the end year. Both in today's dollars, under the example household's assumptions.
These figures come from the deterministic projection under the example household's assumptions listed above (returns, inflation, spending and end year), not from a simulation.
That gap is what sequence-of-returns risk means in this model. It is a property of the arithmetic of withdrawing from a falling balance, not a forecast of any market, and it says nothing about what anyone should do about it. Run your own plan in the Sensitivity and Historical backtest screens to see how it responds.
Sample household with invented figures. This is not your plan and says nothing about your situation. Educational modeling output; hypothetical, not a prediction or guarantee, and not financial, investment, tax, or legal advice. Demo simulations use preset sampling settings. To run your own figures, see https://9to95.com/pricing.html. Use of 9to95 is subject to the Terms of Service at https://9to95.com/terms.html.
How to read the figures
- Today's dollars. Every dollar figure is in today's dollars.
- The single path. One smooth future with average returns. It answers yes or no: does the money last to age 95?
- Lasts each simulated life. The share of simulated futures in which the money lasts for as long as the person lives in that future. A future that ends early counts as a success even if the money would have run out later.
- Lasts to age 95. The share of simulated futures in which the money lasts to age 95. This is the stricter reading and it is usually the lower figure.
- Median ending balance. What is left in investment accounts at the end, in the middle future. The low case (10th percentile) ends at zero in every variant for this household, so it is left out of the tables.
Eight things the calculator applies without being asked
A household with only the basics filled in is not a bare model. The calculator applies these without being asked:
- Health-insurance and Medicare costs are modeled.
- Discretionary spending follows an age curve: it drifts down through retirement and turns up late in life.
- A late-life care event is included: a fixed cost for a fixed number of years starting at a fixed age.
- Withdrawals are taken across account types in proportion to their balances.
- While someone in the household buys marketplace health insurance before Medicare, withdrawals draw cash and tax-free account money first where they can, to keep income below the level at which the insurance subsidy stops.
- In the Monte Carlo readings, when one person in a couple dies in a simulated future, the survivor's taxes switch to single filing, household spending is scaled down (to three quarters by default), and Social Security pays the survivor benefit. This household is one person, so this one does nothing here.
- In the Monte Carlo readings, simulated futures include occasional large home-repair costs beyond the regular maintenance budget, for a household that owns a home. This household does not own a home, so this one does nothing here.
- Results are shown in today's dollars.
Step 1. Read the single path
The change: none. This is the starting point.
Ask your assistant: Run my plan on the single path. Does the money last to 95?
| Reading | Result |
|---|---|
| Lasts to age 95, single path | Yes |
| Ending balance, everything owned | $745,000 |
The single path is one future. It cannot show how often a plan fails.
Step 2. Read the two Monte Carlo readings
The change: none.
Ask your assistant: Now run 500 simulated futures and give me both chance readings.
| Reading | Result |
|---|---|
| Lasts each simulated life | 82% |
| Lasts to age 95 | 69% |
| Median ending balance | $1,814,000 |
Chances are shares of 500 simulated futures. Balances are in today's dollars. What the rows mean.
The ending figure in step 1 and the middle ending balance here are not the same measure: the single path is measured at age 95 with fixed average returns, while each simulated future is measured when the simulated life in that future ends, with returns drawn from history.
The two chances answer different questions, which is why they differ. Neither one describes any real person.
Step 3. Split spending into essential and discretionary
The change: each expense is marked essential or discretionary. No amount changes.
Ask your assistant: Mark my expenses as essential or discretionary.
| Yearly spending | Amount |
|---|---|
| Essential | $46,000 |
| Discretionary | $22,000 |
This sample household's file already marks every expense this way, so nothing moves: the readings are the ones in step 2.
What stayed the same: every figure. The split matters later: guardrails adjust only the discretionary part.
Step 4. Change the retirement age
The change: the retirement age moves from 55 to 57. This example works 2 years longer.
Ask your assistant: What changes if I stop working at 57 and not 55?
| Reading | Before | After |
|---|---|---|
| Lasts each simulated life | 82% | 89% |
| Lasts to age 95 | 69% | 78% |
| Median ending balance | $1,814,000 | $2,325,000 |
Chances are shares of 500 simulated futures. Balances are in today's dollars. What the rows mean.
What stayed the same: spending, accounts, and every other setting.
Your own figures: see pricing.
Step 5. Change the Social Security claim age
The change: the claim age moves from 67 to 70.
Ask your assistant: What changes if I claim Social Security at 70 and not 67?
| Reading | Before | After |
|---|---|---|
| Lasts each simulated life | 82% | 83% |
| Lasts to age 95 | 69% | 70% |
| Median ending balance | $1,814,000 | $1,779,000 |
Chances are shares of 500 simulated futures. Balances are in today's dollars. What the rows mean.
What stayed the same: the retirement age from step 1 (step 4's change is not carried forward) and every other setting.
Each step from here on starts again from the step 1 household, so each table shows one change and nothing else.
Step 6. Change the order withdrawals are taken in
The change: three orders, one at a time. In proportion to balances (the default); cash and taxable accounts first, then tax-deferred accounts up to a set tax bracket, then tax-free accounts, then the rest of the tax-deferred; and filling a tax bracket each year.
Ask your assistant: Run it three ways: withdrawals in proportion, cash and taxable first, and filling a tax bracket.
| Reading | In proportion (default) | Cash and taxable first | Filling a bracket |
|---|---|---|---|
| Lasts each simulated life | 82% | 83% | 83% |
| Lasts to age 95 | 69% | 71% | 69% |
| Median ending balance | $1,814,000 | $2,038,000 | $1,859,000 |
Chances are shares of 500 simulated futures. Balances are in today's dollars. What the rows mean.
What stayed the same: spending and everything else. Only the order changes.
Step 7. Switch a default off and on
The change: the fixed late-life care event is switched off. On the single path that removes the cost. In the Monte Carlo readings the calculator replaces it with a care cost that arrives by chance in some futures, so those rows compare a fixed care event with a chance-based one. Then the care event is switched back on and the spending curve is switched off.
Ask your assistant: Switch the late-life care event off and show me what moves. Then switch it back and turn the spending curve off.
The late-life care event
| Reading | Fixed event (default) | Chance-based |
|---|---|---|
| Lasts each simulated life | 82% | 86% |
| Lasts to age 95 | 69% | 76% |
| Median ending balance | $1,814,000 | $2,090,000 |
Chances are shares of 500 simulated futures. Balances are in today's dollars. What the rows mean.
The spending curve
| Reading | Default on | Default off |
|---|---|---|
| Lasts each simulated life | 82% | 82% |
| Lasts to age 95 | 69% | 67% |
| Median ending balance | $1,814,000 | $1,776,000 |
Chances are shares of 500 simulated futures. Balances are in today's dollars. What the rows mean.
What stayed the same: every other setting.
This shows how much of a result comes from a default. Both defaults are back on for the steps that follow.
Step 8. Switch guardrails on
The change: guardrails are switched on. When a simulated future goes badly, discretionary spending is cut by a set share; when it goes well, it is raised. Essential spending is not touched.
Ask your assistant: Switch guardrails on.
| Reading | Before | After |
|---|---|---|
| Lasts each simulated life | 82% | 88% |
| Lasts to age 95 | 69% | 76% |
| Median ending balance | $1,814,000 | $1,830,000 |
Chances are shares of 500 simulated futures. Balances are in today's dollars. What the rows mean.
What stayed the same: the single path. Guardrails act in the Monte Carlo readings only, so the answer in step 1 does not change. The calculator says so when it returns the single path.
With guardrails on, a future counts as a success when spending was cut to make the money last. The chance rises because spending fell in the futures that went badly, not because the plan became safer at the original spending.
Your own figures: see pricing.
Step 9. Add a spending floor, then a ceiling
The change: a floor is the lowest yearly spending a guardrail cut may reach. A ceiling is the highest yearly spending a guardrail raise may reach. Here the floor is $66,000 a year, then a ceiling of $79,000 a year is added, with guardrails still on. Both are chosen for illustration, relative to this household's discretionary spending; the floor is the lowest tried that changes a figure.
Ask your assistant: Keep guardrails on, set a spending floor of $66,000, then add a ceiling of $79,000.
| Reading | Guardrails only | With the floor | Floor and ceiling |
|---|---|---|---|
| Lasts each simulated life | 88% | 87% | 87% |
| Lasts to age 95 | 76% | 75% | 75% |
| Median ending balance | $1,830,000 | $1,830,000 | $1,841,000 |
Chances are shares of 500 simulated futures. Balances are in today's dollars. What the rows mean.
A floor limits how far spending is cut, and a ceiling limits how far it is raised. For this household, at these figures, they change the chances only slightly, by about one percentage point. The middle ending balance is no higher with the floor, and rises once the ceiling is added.
What stayed the same: the single path, as in step 8.
The figures for a floor and a ceiling come from the person using the calculator. The assistant asks for them and does not propose them.
Step 10. Put the variants side by side
The change: none. The household from step 1 and the variants from steps 4, 5 and 6 are set side by side on the single path.
Ask your assistant: Put the plans from steps 1, 4, 5 and 6 side by side.
| Plan | What differs | Lasts to 95? | Ending balance, everything owned |
|---|---|---|---|
| Step 1 household | Nothing: the starting point | Yes | $745,000 |
| Step 4 variant | Retires at 57 in place of 55 | Yes | $1,417,000 |
| Step 5 variant | Claims Social Security at 70 in place of 67 | Yes | $846,000 |
| Step 6 variant | Cash and taxable accounts first | Yes | $1,133,000 |
| Step 6 variant | Filling a tax bracket each year | Yes | $830,000 |
This table shows the single path only. It has no chance figures, and plans that differ only in guardrails, the floor or the ceiling look identical in it.
Now run it on your own figures
Every step in this guide is one sentence to your assistant, with your own household in place of the invented one.
One plan.
Every calculator tool is included.
$89 a year or $9 a month.
Planned prices, in US dollars.
30-day refund.
On any charge.
Subscriptions are not open yet. Nothing can be bought today.
What this guide leaves out
Rental property, stock-based pay, annuities, insurance, inherited accounts, dependents, trusts and business income are outside this guide. The known limits page lists what the calculator does not model.