monte carlo
- Thread starter bobbee25
- Start date
I use the VG Nest Egg Calculator. No matter what I put in, it always gives a 99% success rate. There's always that 1% chance of failure. Then, click projected savings balance, it's more reassuring. There's an explanation of how the success rate is determined. Shows graphs and historical data. I guess CD's give you one interest rate. They don't waver with market fluctuations.
"Monte Carlo simulation gives you a more realistic assessment of how the future may unfold by looking at a wide variety of potential market scenarios that take fluctuating market returns into account. Instead of basing calculations on just one average rate of return, we generate 100,000 simulations of hypothetical market scenarios, and calculate the impact on your savings during your retirement. Each simulation includes up and down markets of various lengths, intensities, and combinations."
"Monte Carlo simulation gives you a more realistic assessment of how the future may unfold by looking at a wide variety of potential market scenarios that take fluctuating market returns into account. Instead of basing calculations on just one average rate of return, we generate 100,000 simulations of hypothetical market scenarios, and calculate the impact on your savings during your retirement. Each simulation includes up and down markets of various lengths, intensities, and combinations."
monte carlo isa statistical technique for estimating the likelihood of an output and variation of outputs. This is used in many other fields than retirement planning.
In your case it really depends on the make up of the modeling program.... that is what do they make statistically vary?
If all you have is CD's I would think they would have to look at renewal rate over your life time assuming all of yours are FDIC and not over the limit.
So which program are you using?
In your case it really depends on the make up of the modeling program.... that is what do they make statistically vary?
If all you have is CD's I would think they would have to look at renewal rate over your life time assuming all of yours are FDIC and not over the limit.
So which program are you using?
