Retirement Calculator — Will Your Money Last?

How the Retiris retirement calculator works

The engine is deliberately simple enough to explain in a paragraph. Before retirement it adds your contributions at the end of each year and grows the balance at your chosen return. Contributions rise with inflation, so a £6,000 contribution keeps the same purchasing power throughout. From your retirement age onwards, contributions stop and the model withdraws your target spending at the start of each year, less any guaranteed income that has started by then, with the remaining balance growing for the rest of that year. Spending also rises with inflation each year.

Every balance labelled “in today’s money” has been divided back by compounded inflation, so the charts show purchasing power rather than a large but misleading future number. The portfolio is depleted the first year it cannot fund the full withdrawal.

The full engine, including the simulation, is described on how the Retiris retirement model works.

What assumptions does the calculator make?

Every assumption is an input you can change, and none of them are hidden. Here is what each one does and why the default is what it is.

Not modelled: taxes, platform and fund charges, spending that changes shape through retirement, care costs, property, one-off windfalls, and any difference between account types. Those are real and they matter — treat the output as a starting point for thinking, not a financial plan.

What is a Monte Carlo simulation?

A steady 6% every year is a useful simplification and a poor description of markets. A Monte Carlo simulation runs the same plan many times over, and in each run it draws a fresh return for every year at random from a distribution centred on your expected return and spread out by your volatility figure. One run might open with three strong years; another might open with a 20% fall. Retiris runs 1,000 of them and reports how many funded your spending all the way to your planning age.

The shaded band on the balance chart is the middle 80% of those runs: 10% of runs ended up above the top edge and 10% below the bottom edge at each age. It is a picture of the range the model produced, which is far more honest than a single smooth curve.

What does a probability of success mean?

It means one specific thing: the percentage of simulated runs where the portfolio never ran out. It is not a chance of being “fine”, and it is not a real-world probability. It inherits every assumption you entered, so a 95% result with an optimistic return assumption is weaker evidence than an 80% result with a cautious one.

It is also worth remembering that failure in the model is binary and abrupt, while a real retiree would notice a portfolio falling behind and adjust their spending. In practice a result in the mid-80s or above is usually treated as a reasonably resilient plan, and anything below about 70% is a signal to test lower spending, a later retirement age or higher contributions — all of which you can do by changing an input above.

Why retirement outcomes are uncertain

• Market volatility

  Returns arrive unevenly. Long-run averages tell you very little about the specific decades you happen to retire into.

• Sequence-of-returns risk

  Poor returns in the first few years of drawdown do disproportionate damage, because you are selling assets to fund spending while prices are low. The same average return in a different order can produce a completely different ending balance.

• Inflation

  A run of higher inflation quietly raises every future withdrawal. Two percentage points of extra inflation over thirty years is a very large change in required spending.

• Longevity

  Nobody knows their planning horizon. Extending a plan from age 90 to age 100 adds ten years of withdrawals to the most fragile part of the projection.

• Spending is not flat

  Real retirement spending often starts higher, dips through the middle years, and can rise again with care needs. A flat inflation-linked figure is a simplification.

Limitations

This is educational planning software. It produces illustrations from the assumptions you enter, and those illustrations are not predictions, guarantees or personal recommendations. Retiris is not authorised to give regulated financial advice and does not know your tax position, health, family circumstances or risk tolerance. For decisions that matter, use this to prepare good questions and then speak to a regulated adviser in your country.

Common questions