Efficient Solutions Inc.
MCRetire - Retirement Calculator
Monte Carlo Simulator
MCRetire 1.2 (download file MC1220.exe)
MCRetire (Monte Carlo Retire) is a simulation program which will help you decide whether your retirement assets are adequate for your needs. Unlike many retirement calculators, MCRetire takes into account the fact that the return of your investment will fluctuate during the retirement period.
Since there is no formula which describes the success probability of a retirement strategy in the presence of return fluctuations, MCRetire attacks the problem using "Monte Carlo simulation." In this technique, multiple randomly selected realizations (typically thousands) are generated, and the probability of success is estimated by comparing the number of successful realizations to the total number.
For additional material on retirement strategies with varying returns, see "The Retirement Calculator From Hell - Part II" in the Winter 2001 issue of William Bernstein's online journal Efficient Frontier.