Retirement Savings Model

Age	Year	Stocks %	Contribution	Investment returns	Spending	SS/Pension	Portfolio withdrawal	Net impact	Portfolio (nominal)	Portfolio (today's $)

Each year the portfolio earns a blended return based on that year's stock/bond allocation. During working years, contributions are added (and grown with inflation). Starting at retirement, you withdraw the amount needed to cover spending (also inflation-adjusted) minus any Social Security or pension income.

Volatility is auto-derived from your allocation using a two-asset portfolio formula (stocks σ ≈ 17%, bonds σ ≈ 6%, correlation ρ ≈ −0.10), giving ~12% for a 70/30 portfolio. You can override the σ field for custom scenarios.

Bond tent: When enabled, the portfolio shifts to a higher bond allocation at retirement to cushion sequence-of-returns risk, then glides back to your target mix over the specified years. Both the deterministic line and the Monte Carlo simulation use the time-varying allocation — so reduced volatility during the tent period is reflected in the MC bands. This typically raises success probability in early retirement at a small cost to long-term expected returns.

The blue line is the deterministic (constant average returns) path. The green band shows the Monte Carlo interquartile range (P25–P75): 1,000 simulations where each year's return is drawn from a normal distribution centred on that year's blended return with the corresponding σ. Probability of success is the share of MC simulations where the portfolio survives to your plan-to age.

"Today's dollars" divides nominal balances by cumulative inflation. The "nest egg needed" is the present-value lump sum to fund all net withdrawals through plan age (discounted at the target-allocation real return).

What moves the needle re-runs the Monte Carlo with one input swung at a time (ages by a couple of years, dollar amounts by 10%, rates by a percentage point) while everything else is held fixed, and reports the change in probability of success. Every run uses 400 simulations drawn from the same random seed, so a bar reflects the input itself rather than simulation noise. Swinging the stock allocation also re-derives volatility, exactly as the σ field does. Sensitivity is specific to your inputs — a plan that is already 99% funded shows small bars everywhere.

Limitations: Returns are assumed normally distributed (no fat tails), no taxes (use the tax rate input to gross up), no healthcare shocks, no RMDs. The ~4% rule is a common rule of thumb for a 70/30 US portfolio.

Year	Payments	Principal	Interest	Of which extra	Ending balance

The required monthly payment is the standard amortization payment that retires your current balance at your interest rate over the years remaining. The standard schedule — the grey dashed line — is that payment made monthly with nothing extra.

Bi-weekly pays half the required monthly amount every 14 days, with interest charged at the annual rate ÷ 26 per period. 26 half-payments a year equal 13 monthly payments, and that extra payment goes entirely to principal. Some servicers hold bi-weekly payments and apply them once a month; the result is nearly the same.

Extra payments are applied straight to principal: per payment, once at the end of each loan year, and/or once today. Your required payment doesn't change, so extras shorten the loan instead of lowering the payment.

Limitations: Fixed-rate loans only. Escrow, PMI and prepayment penalties aren't modelled. Real servicers accrue interest daily, so their payoff date can differ by a payment or two.