Chance of Success uses Monte Carlo simulations to show how your plan might hold up under different investment returns and inflation rates. Your regular forecast shows one outcome based on your assumptions; Chance of Success explores a range of possible outcomes.

Table of Contents

• How the simulations work
• Running a simulation
• What counts as success?
• Reading the chart and results
• Adjusting simulation settings
• Using the results to explore your plan
• Related articles

How the simulations work

Each simulated future is called a path. A simulation generates many paths using your scenario's accounts, income, expenses, life events, and other assumptions. Learn more about using Forecasting scenarios [insert link].

For each path, annual returns and inflation vary around your assumptions. Volatility controls how much they can vary. Because losses weigh more heavily than equal-sized gains, the typical path lands near your stated growth rate.

Investment accounts share the same simulated market movement each year, but each account's volatility determines how strongly it responds. Real estate moves separately. Inflation can stay higher or lower for consecutive years, and weaker market years tend to coincide with somewhat higher inflation.

This lets you see why the order of returns matters. Poor returns early in retirement can have a different effect from poor returns later, especially when you're withdrawing money to cover expenses.

These are hypothetical futures generated from your assumptions—not predictions of specific market events or a replay of historical market years.

Running a simulation

1. Go to Forecasting in the Monarch web app and select the scenario you want to explore.
2. Select Chance of Success. On your first visit, a walkthrough introduces the results before you run your simulation.
3. Review the results when the simulation finishes. When you open a scenario without completed results, Chance of Success can start a simulation automatically.
4. To generate a new set of paths, select Run simulation.

If you change your plan or simulation assumptions, run the simulation again to see results based on those changes. Switching between chart views does not require a new run.

What counts as success?

The Chance of Success percentage shows the share of simulated paths that meet your success criteria. A path must avoid running out of money throughout the plan and finish at or above your selected ending-net-worth target.

For example, if 800 of 1,000 paths meet those criteria, the simulated chance of success is 80%. That means the plan met your criteria in 80% of those simulated futures—not that there is a guaranteed 80% probability of a particular real-world outcome.

You can set an ending-net-worth target in the Chance of Success settings. A $0 target focuses on reaching the end without running out of money. A higher target also requires your plan to end with at least that amount. Changing the target reclassifies existing paths without running a new simulation.

A path that runs out of money at any point remains unsuccessful even if a later income event brings its net worth back above zero. A path can also remain above zero throughout the plan but be unsuccessful because it ends below your target.

Note: Success currently uses total projected net worth, not just money available to spend. Including a home or other assets that you cannot readily use for expenses can make the result look more reassuring than your available cash supports. Review which accounts are included and their withdrawal settings before interpreting the percentage.

Reading the chart and results

The Chance of Success gauge shows the percentage and the number of paths that met your criteria. The charts beside it show how outcomes are distributed for Net worth at retirement, Net worth at end, and Shortfall age.

Each bar groups paths with similar values. Hover over a bar to see the values it covers and how many paths in that group met or missed your criteria. The shortfall chart shows when paths ran out of money, including any that never rose above zero; it does not include paths that only missed your ending-net-worth target.

Use the chart's Paths and Range options to choose how much detail to display:

• Paths shows individual simulated futures and dots representing their ending values. Paths are colored to show whether they met your criteria. Hover over a path or dot to highlight that future and see its details.
• Range shows shaded bands instead of individual paths. The wider band contains nine in ten simulated values for each year; the narrower band contains one in five values around the middle. The narrower band also appears in Paths view.

These bands summarize each year separately. They don’t mean that nine in ten paths stay within the wider band for the entire plan, or that its edges represent the best and worst possible outcomes.

Your regular plan line stays visible for comparison. A smooth plan line and a wide range of simulated outcomes can both be reasonable: one uses fixed assumptions, while the other explores variation around them.

Adjusting simulation settings

You can refine the assumptions in the Chance of Success settings:

• Number of paths: Choose between 100 and 5,000 simulated futures. More paths can make the estimated percentage and ranges more stable, but take longer to calculate. They do not make your underlying assumptions more accurate.
• Inflation rate and volatility: Set your inflation assumption and how much inflation can vary around it
• Account growth rates and volatility: Review the expected growth and year-to-year variation for each account
• Use fixed seed: Repeat the same set of simulated market conditions. This can help you compare the effect of changing an assumption without also changing the random conditions used in the simulation.

Without a fixed seed, each new run draws a new set of conditions, so results can change slightly even when your plan has not changed. The fixed-seed selection lasts for the current session.

Core simulation settings are saved with your scenario. Account volatility is saved on the account and affects every scenario that uses it. Calculated paths aren’t saved: reloading the page or signing out clears the results, so a later visit may generate a new simulation.

Using the results to explore your plan

Start by checking that your income, expenses, contributions, account inclusion, and life events reflect the plan you actually want to model. For more guidance, see Managing Forecasting Assumptions [insert link] and Life Events in Forecasting [insert link]. Then change one meaningful assumption at a time—for example, your retirement timing or planned spending—and run the simulation again.

Focus on how the percentage, range of outcomes, and timing of shortfalls change together. A higher ending-net-worth target can lower the success percentage without changing the simulated futures themselves, and a wide range is a sign of uncertainty—not automatically a sign that something is wrong.

Use Chance of Success to explore tradeoffs and uncertainty, not as a guarantee of your plan’s outcome.

Related articles

• Forecasting in Monarch
• Managing Forecasting Assumptions
• Life Events in Forecasting
• Using Forecasting Scenarios
• Forecasting setup checklist

These forecasts show hypothetical outcomes based on your account information and the assumptions in the model, including any changes you have made. Projections do not guarantee future performance. Even small shifts in assumptions can lead to very different results over time. If you are viewing a projected retirement balance or goal outcome, it is based on assumptions such as rate of return, inflation, tax rates, and life expectancy. We show you those assumptions, and you can adjust them. If you change the inputs, the outcome will change too. This tool is for informational and educational purposes only. It is not investment, tax, legal, or financial advice, and it should not be the only basis for a major financial decision.