Sample plan

A good income, and it still doesn't fund retirement.

Most sample plans show you someone who succeeds in fulfilling their goals. We think it's more instructive to start with a household that doesn't — because that is the more common situation. What a planning tool does when the answer is "not yet" is instructive.

The household

Age: 40, planning to age 90
Household income: $250,000
Invested today: $80,000
Saving: $10,000 a year — about 3% of income — until 65
College: $25,000 a year for 4 years, starting at 47
Retirement spending: $150,000 a year from 65
Social Security: $63,000 a year from 67
Allocation: Balanced

What our projection says

Funds run out at 69

The portfolio peaks around $691,143 at retirement and is exhausted four years later. Across the thousand simulations run, the portfolio never runs out in 0% of them — not one path in a thousand.

Nothing here is unusual. A high income and a 3% savings rate is an ordinary combination, and the gap only becomes visible when you put the whole life on one timeline.

Projected portfolio value from age 40 to 90. It rises to about $690,000 at age 65, then falls to zero by age 69. A shaded band shows the 10th to 90th percentile of simulated outcomes. — The projection for this household. The shaded band is the 10th–90th percentile of simulated outcomes; the line is the central path. Generated from the same engine run as the figures above — hypothetical, for a fictional household.

The useful bit

A verdict on its own is not worth much. We also need to identify the changes that move it.

Same household, one thing changed at a time. Each percentage is the share of a thousand simulations in which the portfolio never runs out.
Change	Never runs out	Money runs out
Nothing — as it stands	0% none of the 1,000	age 69
Save $30,000 a year instead of $10,000	9.6%	age 79
Spend $100,000 a year in retirement instead of $150,000	1.7%	age 73
Both together	78.2%	doesn't

Saving three times as much buys ten more years and still fails. Cutting retirement spending by a third barely registers on its own. Together they fund 43 years and the plan holds.

That interaction is the thing a spreadsheet rarely shows and a rule of thumb never does. It is also why the product does not lead with a single number — the number moves for reasons, and the reasons are what you can act on.

What this illustration does not do

It does not model taxes on withdrawals, an inheritance, insurance or annuity products, or a change in the allocation over time. It assumes a fixed inflation rate and a single retirement date. Those are real limitations, and the product says so in the plan itself rather than in a footnote.

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