Retirement Success Odds by Age

Methodology

This tracker runs 5,000 Monte Carlo simulation paths per age and scenario, using an expected stock return derived from the current Shiller CAPE ratio (40.71). The CAPE earnings yield is blended 50/50 with a long-term real stock return of 7%, a common practitioner compromise (some researchers consider raw 1/CAPE too pessimistic, others do not), giving a compound real stock return of 4.7%. It applies to the first 10 years of each simulated retirement, roughly the horizon over which CAPE has historically been most informative (imperfectly); later years are resampled from history without adjustment. Every month and every scenario reuses the same random draws, so changes between months reflect valuations, gaps between scenarios reflect Social Security, and every figure is reproducible from the same inputs.

Portfolio only: the modeled household draws 4.0% ($40,000/year) from the portfolio alone, with no Social Security or other income. This is the scenario closest to Morningstar's published 3.9% figure below, though not identical: Morningstar's base case holds 30-50% equities, while this tracker holds 60% stocks.

With Social Security: the same household also receives $24,000/year in Social Security starting at age 67 (today's dollars), which reduces the amount drawn from the portfolio.

With Social Security reduced: the same scenario, but Social Security income is modeled at 22.0% lower — the SSA Trustees' 2026 report projects the OASI trust fund may be depleted around 2032, after which continuing payroll tax revenue would only cover a reduced share of scheduled benefits unless Congress acts. This tracker applies that reduction as a flat percentage across the whole retirement, which is a simplification — in practice a benefit cut (if it happens) would only take effect from the depletion year forward, not retroactively. A household retiring well before 2032 would see a smaller real-world impact than this flat approximation shows; one retiring at or after it would see a similar impact. This is a modeling scenario, not a prediction — Congress may act to preserve full benefits.

Reference: Morningstar's published safe withdrawal rate

Morningstar, The State of Retirement Income (2026) publishes an independent safe withdrawal rate estimate, from its own Monte Carlo study with forward-looking capital-market assumptions: 3.9% starting withdrawal, targeting a 90.0% probability of lasting 30 years on a 30-50% equities allocation. It is shown here as an independent reference point, not a RetireLab estimate — the two methodologies use different assumptions and are not directly interchangeable.

Assumptions and limitations

• Starting balance: $1,000,000 (odds are largely independent of balance at a fixed withdrawal rate)
• Allocation: 60% stocks / 40% bonds (static, no glide path)
• Planning age: 95
• No pension, no healthcare bridge, no state taxes
• Withdrawals are inflation-adjusted (real returns used throughout)
• Only the stock portion is valuation-adjusted. Bond returns are resampled from history unchanged.
• After the first decade, returns revert to the unconditional historical mean, with no extra rebound after a weak decade. That leans conservative.
• The Social Security reduction is a flat-percentage approximation, not a year-accurate benefit schedule
• Results are not personalized financial advice. Consult a licensed financial advisor before making retirement decisions.

For example, a household retiring at 65 shows 89.4% modeled success odds on portfolio income alone, 100.0% with Social Security included, and 99.9% if that Social Security benefit were reduced as described above.