Can you actually afford to stop working?
A retirement projection built on one assumed rate of return always gives a single confident answer, and that answer is worth very little. This model runs your household year by year until the younger of you reaches the age you plan through, then treats the two things nobody can promise, long-run returns and inflation, as uncertain. The output is the probability your money outlives you, not a number pretending to know.
Personal Intermediate Monte Carlo Pro engine
After you install, this is the model to open.
Are We Ready to Retire?
- In your spreadsheet, click the Sortia icon in the strip of icons down the right-hand edge. No strip? Click the arrow at the bottom-right to open it. You can also use Extensions, then Sortia, then Open Sortia.
- Click Start from a template and put that name in the search box.
- Pick the card with that name and click Load this template. It arrives on a new tab with real numbers already in it.
This one runs on a Pro engine, and every free install includes five full-quality runs on your own numbers, shared across all five Pro engines rather than five for each. After that, Pro is $199/year.
The answer
The static plan says yes with room to spare. Ten thousand trials put a number on it:
- Savings at retirement
- $1,614,667 the point-estimate plan
- Point estimate
- lasts all 29 years with $976,965 left over
- Chance it actually lasts
- 80% four trials in five
- 10th-percentile outcome
- runs out after 26 years three years short
On best-guess assumptions this couple retires at 65 with $1,614,667 and still has $976,965 at the end. Let the two return rates and inflation vary and the money lasts the full stretch in 80% of trials, with the tenth-percentile outcome running dry three years early. Four in five is a reasonable place to stand, and the one in five is the number worth seeing before you hand in notice. The detail that catches people out is the pension: it defaults to not rising with inflation, because most private ones do not, and a fixed $18,000 buys half as much after thirty years while Social Security keeps up.
The model
A couple aged 61 and 62 earning $150,000 between them, both retiring at 65, wanting 75% of their pay at that point to live on. Works at any age: a 28-year-old gets a 62-year projection instead of a 29-year one, and setting the second person's age to zero removes them entirely.
| Household pay today | $150,000 |
| Pay growth | 3% a year |
| Income wanted in retirement | 75% of pay at retirement, $126,620/yr |
| Social Security, both retired | $54,000/yr, rises with inflation |
| Person 1 pension | $18,000/yr, fixed |
| Savings today | $1,200,000 |
| Added each working year | $20,000 |
| Return before / after retiring | 6% / 4.5% (both uncertain) |
| Inflation | 1.5% - 2.5% - 4.5% (uncertain) |
Once it is in your sheet
- The model arrives with real numbers in it and runs as it stands, so you can press the button first and understand it second.
- Change the numbers to yours. The sheet marks which cells are inputs and which hold formulas, and most labels carry a note explaining the row.
- Press the run button at the bottom of the panel. It is labeled for the tool you are in, and the result lands on its own tab, with a written reading of it beside the figures.
Never used Google Sheets? Start here goes the whole way, in seven steps, and assumes nothing.
Next question
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Every model like this one, and the method behind them: Monte Carlo simulation.