Monte Carlo survivability + bucket strategy for early retirement. Model how bad first-decade returns interact with your cash / bond / stock buckets and stress-test against 1929, 1966, 2000, and 2008.
The retirement portfolio you're starting with. All three buckets are carved out of this on day one.
Real annual spending in retirement (today's dollars). Sizes the cash and bond buckets and is the amount drawn each year.
Retirement horizon in years. 30 is the classic Bengen SWR window; 40+ approximates a very early retirement.
Bucket 1 size, expressed as months of spending. The first line of defense against sequence-of-returns risk — spend from cash while stocks recover.
Bucket 2 size, expressed as years of spending. The bridge between the cash bucket and the equity bucket.
After sizing the cash + bond buckets, this % of what's left goes to stocks (bucket 3). The rest stacks onto bonds.
Expected real annual return for the stock bucket. Used as μ for the Monte Carlo return distribution.
Expected real annual return for the bond bucket. Held constant each year — bond dispersion is second-order to equity dispersion.
Standard deviation of annual stock returns for the Monte Carlo. 15% roughly matches long-run US equities. Set to 0 to see the deterministic path only.
| Period | 10th percentile | Median | 90th percentile |
|---|---|---|---|
| 1 | $1.31M | $1.52M | $1.74M |
| 2 | $1.22M | $1.53M | $1.87M |
| 3 | $1.19M | $1.54M | $1.98M |
| 4 | $1.11M | $1.54M | $2.12M |
| 5 | $1.10M | $1.58M | $2.24M |
| 6 | $1.06M | $1.59M | $2.39M |
| 7 | $1.04M | $1.59M | $2.47M |
| 8 | $1.02M | $1.63M | $2.60M |
| 9 | $976K | $1.61M | $2.73M |
| 10 | $943K | $1.64M | $2.78M |
| 11 | $917K | $1.68M | $3.03M |
| 12 | $887K | $1.73M | $3.20M |
| 13 | $850K | $1.78M | $3.30M |
| 14 | $809K | $1.77M | $3.45M |
| 15 | $765K | $1.81M | $3.65M |
| 16 | $721K | $1.89M | $3.93M |
| 17 | $691K | $1.94M | $4.35M |
| 18 | $629K | $1.99M | $4.38M |
| 19 | $577K | $2.01M | $4.84M |
| 20 | $534K | $2.03M | $5.14M |
| 21 | $498K | $2.08M | $5.33M |
| 22 | $435K | $2.14M | $5.54M |
| 23 | $400K | $2.21M | $6.09M |
| 24 | $359K | $2.30M | $6.38M |
| 25 | $317K | $2.32M | $6.72M |
| 26 | $276K | $2.31M | $7.10M |
| 27 | $214K | $2.38M | $7.77M |
| 28 | $158K | $2.49M | $8.18M |
| 29 | $103K | $2.56M | $8.41M |
| 30 | $42K | $2.53M | $9.02M |
Sequence-of-returns risk is real but hard to precisely quantify — this is a planning model, not a forecast of your specific outcome. Market returns are not guaranteed. Historical windows are compressed illustrations, not full historical simulations. Not financial advice; confirm any withdrawal strategy with a fiduciary.