How the market simulation works

The central projection grows at a steady rate every year. Markets don't do that. Here's what the fan chart and the "odds your money lasts" are telling you.

The central line on Overview is the plan with steady growth every single year — each kind of investment growing at its long-run rate (shares 5.5% a year above inflation, unless you change it). It's a useful starting point, and it's what most retirement calculators show. But nobody gets steady growth. Some years markets fall 30%; the order in which good and bad years arrive matters enormously when you're drawing money out.

Hundreds of possible futures

The simulation replays your plan 2,000 times, each with a different sequence of yearly returns for shares, bonds, cash and property, taking account of how they tend to move together (shares and property often fall at the same time; bonds sometimes cushion the blow).

Each year's return is drawn around the long-run growth rate with that investment's typical swing — half the years better, half worse. So a typical future grows at about the same long-run rate as the central line — a mix of shares and bonds does a little better, because rebalancing it each year means the swings partly cancel out — and the fan shows how far luck can pull you either side of it. To see how your plan does through real markets instead, Market Scenarios replays every year since 1928.

Every one of those 2,000 futures produces a net-worth path. Lining them up gives you the fan chart: the darker the band, the more of the futures passed through it. The outer edge is the worst 5% and best 5% of outcomes.

The number that matters

Above the chart: "87% of 2,000 simulated futures keep your money going until 90."

That is the share of futures in which you never ran out — where every year's spending was covered by income or by selling investments, without your accessible money going negative. Pensions are only drawn once you've retired, and drawdown is taxed as income, just as it would be in reality.

A good plan doesn't need 100%. Around 85% and above is the range most planners are comfortable with, because in the bad futures you'd notice years in advance and adjust — spend a little less, work a little longer. Below 70% deserves attention.

What moves the number

Retirement age — the single biggest lever. Try the slider.
Spending in retirement — a 10% cut in spending often adds more resilience than a 10% rise in returns.
How the money is invested — more cash is calmer but grows less; more shares grows more but widens the fan.
The cash buffer — keeping a couple of years of spending in cash means you're not forced to sell shares in a bad year.

What the simulation doesn't know

It assumes the future is statistically like the past, with your inputs held fixed. It doesn't know about a policy change, a divorce, a windfall or a career change — that's what life events are for.

This is general education, not personal advice. Simulations are illustrations, not predictions.