How the analysis actually works

What is a Monte Carlo simulation?

Monte Carlo simulation is a technique used widely in financial planning, engineering, and science. Instead of projecting one "average" outcome, it runs hundreds or thousands of randomized scenarios and shows the range of possible results. In retirement planning, this means testing your plan against many different sequences of market returns — not just a smooth average. The name comes from the Monte Carlo casino in Monaco, a reference to the randomness involved. It's the industry standard approach for retirement analysis because it captures the real risk of bad market timing in a way that simple average-return projections cannot.

Why does my plan show slightly different results if I run it twice?

Each run draws a fresh set of randomized market scenarios. Because the scenarios are random, two runs with identical inputs will produce results that are very close but not exactly identical — typically within one or two percentage points on the success rate. This is normal and expected. If you run the same inputs multiple times and consistently see 72–74%, that range is your answer. A single run is reliable; the small variation between runs is just statistical noise.

What is a "Roth conversion" and should I do one?

A Roth conversion means paying income tax now on money sitting in a traditional IRA or 401(k), then moving it to a Roth account where future growth is tax-free. The appeal: if you expect to be in a higher tax bracket later (due to required withdrawals, Social Security, or a surviving spouse filing single), converting some money now at a lower rate can reduce your total lifetime tax bill. The report models whether a conversion schedule makes mathematical sense for your situation. It is a starting point, not a recommendation — always confirm a specific conversion plan with a tax professional, since individual circumstances (Medicare premiums, state taxes, estate planning) can significantly change the picture.

Why do the income bars sometimes go above my spending goal?

After age 73 or 75 (depending on your birth year), the IRS requires you to withdraw a minimum amount from traditional IRA and 401(k) accounts each year — these are called Required Minimum Distributions, or RMDs. The amount is calculated as a percentage of your account balance, not based on what you need to spend. In years when your RMD exceeds your lifestyle spending, the bars in the chart will extend above your spending goal line. The extra cash doesn't disappear — the model moves it to your taxable accounts — but it does mean you'll owe income tax on the full RMD amount regardless of how much you actually spend.

What does "today's dollars" mean throughout the report?

Inflation makes future dollars worth less than current dollars. A dollar in 20 years buys less than a dollar today. To make the numbers easier to read, all amounts in the report — account balances, income, spending — are shown in today's purchasing power rather than the raw future dollar amount. So if the report shows your portfolio at $2 million at age 85, that means your portfolio would have the same buying power as $2 million does right now. The simulation does account for inflation internally; it's just removed from the displayed numbers so you can compare values across different ages without mentally adjusting for price increases.

What is a "draw rate" and why does it matter?

The draw rate controls how aggressively the model pulls money from your traditional IRA or 401(k) accounts each year before you hit required minimum distributions. A lower draw rate leaves more in the account to grow but may mean pulling more from taxable accounts or Roth. A higher draw rate pulls more from pre-tax accounts now, which can reduce future RMD pressure — but at the cost of higher taxes today. The Full Analysis automatically tests several draw rates and shows you which produces the best outcome for your specific situation.

Is this the same as working with a financial advisor?

No — and that's intentional. This is a one-time analysis with no ongoing relationship, no assets under management, and no product to sell you. Traditional advisors often earn fees based on the assets they manage, which creates an incentive to keep you engaged. This report is designed to give you an honest picture of where you stand, identify your biggest levers, and help you have a more informed conversation if you do work with an advisor. Think of it as a second opinion or a starting point — not a replacement for personalized professional advice on complex situations.

How accurate is this analysis?

The analysis is as accurate as the inputs you provide and the assumptions built into the model. Return assumptions are drawn from institutional capital market forecasts (Vanguard, BlackRock, Fidelity) using historical market data back to 1995. Tax calculations model federal brackets, capital gains stacking, Social Security provisional-income rules, RMDs, Medicare surcharges, and state income tax. That said, this is a model — it cannot account for events that fall outside the range of historical markets, major tax law changes, healthcare emergencies, divorce, or other life disruptions. Use it as a rigorous starting point, not a guarantee.