Frequently Asked Questions

The 4% rule (Bengen 1994) suggests withdrawing 4% of your initial portfolio annually, adjusted for inflation. It was derived from US historical data and targets a 30-year retirement. Our simulator lets you test this — and any other rate — against 150+ years of multi-country data. Under global pooled data, the safe rate for 95% success is typically closer to 3.2-3.5%.

Monte Carlo simulation generates thousands of possible retirement scenarios by randomly sampling from historical market returns. Unlike a single projection using average returns, it shows the full range of possible outcomes and the probability of your plan succeeding under different market conditions.

Block Bootstrap samples contiguous blocks of historical returns (5-15 consecutive years at a time, 10 on average) rather than individual years. This preserves the year-to-year momentum, volatility clustering, and cross-asset correlations that exist in real markets. Pure random sampling would destroy these patterns and underestimate the risk of prolonged downturns.

A risk-based guardrail strategy sets upper and lower bounds on your portfolio's estimated survival probability. When markets perform well and the success rate rises above the upper guardrail, you increase spending. When markets decline and success falls below the lower guardrail, you cut spending. This dynamic approach typically allows 15-25% higher initial withdrawals compared to a fixed strategy at the same risk level. FIRE Lab provides this as a free, open tool — similar functionality to advisor-only platforms like IncomeLab, but accessible to individual investors.

Success rate is binary — was the whole plan delivered, yes or no. Funded ratio is continuous: how much of it was. A plan that missed by a little scores a failure with a funded ratio near 1, which is the honest description of failing narrowly. For fixed-plan strategies both are measured in dollars paid versus planned; for dynamic and CAPE, where spending adapts to the portfolio, both revert to counting retirement years survived.

Plan on the market you spend in, then cross-check against the pool. If your expenses are in U.S. dollars, U.S. history is the matching baseline: it is the inflation your spending actually follows, and it already contains 1929, 1966–82, 2000 and 2008. The 16-country pool is a stress test rather than a second opinion about the U.S. — each 5–15 year block is drawn from a different country and carries that country's equities, bonds and CPI, so it asks what happens if your plan meets the institutional shocks other developed markets lived through, not what happens if the U.S. becomes ordinary. It is also stricter than it looks: on the site's default economic settings, taking the pooled 90% withdrawal rate is equivalent to demanding about 98% success on U.S. data. (Measured with fixed inflation-adjusted withdrawals where success requires every planned dollar to be paid, 10,000 paths per seed, JST data from 1900; other strategies will differ.) Run both — if your plan clears under each, the choice stops mattering.

More simulations produce more stable results. 2,000-5,000 is sufficient for most analyses. The server automatically recommends a count based on available computing resources. For sensitivity analysis or asset allocation scans, fewer simulations per combination are used to keep total runtime manageable.

Research (Hurd & Rohwedder 2022) shows that real spending typically declines 1.7-2.4% annually after age 65 as retirees naturally reduce consumption. The spending decline strategy models this pattern, allowing a higher initial withdrawal rate since future spending needs decrease over time.

The calculator models the major financial factors: mortgage payments, property taxes, maintenance, home appreciation, rent growth, and investment returns for the renter. It uses historical data distributions when available. However, it does not model local tax benefits (mortgage interest deduction), rental market constraints, or non-financial factors like stability and flexibility.

No. FIRE Lab is an educational tool for exploring retirement scenarios. Historical returns do not guarantee future performance. The simulator cannot account for your complete financial situation, tax circumstances, or personal risk tolerance. Consult a qualified financial advisor for personalized advice.