De Thomas Wealth Management

Monte Carlo Portfolio Simulator

One average return never tells the truth – markets arrive unevenly, and the order of good and bad years decides whether a withdrawal plan survives. This tool runs your plan through 5,000 simulated market scenarios and shows the odds it lasts, the realistic range of where you could end up, and what inflation quietly does along the way.

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Portfolio

Expected compound returns before inflation – the same assumptions as our other tools. The bands come from each mix's volatility.

Withdrawals

A fixed dollar amount, like a paycheque. Dependable income – but weak markets can run the portfolio dry.
Monthly and quarterly withdrawals come out at the end of each period.

Horizon & Assumptions

How long the plan needs to last. A 65-year-old couple has good odds one of them reaches 95 – when in doubt, plan long.
Used to index withdrawals and to translate results into today's purchasing power. The Bank of Canada targets 2%.
Today's dollars: what the money actually buys, after inflation. The honest default.
Plan Success Rate
–
Median ending value
$0
Risk of running out
–

Where your portfolio could go

Each shaded band shows where the 5,000 simulated scenarios landed – the wide band holds 8 out of 10 scenarios (10th to 90th percentile), the darker band the middle half (25th to 75th), and the gold line is the median. Tip: hovering shows the full range's top and bottom. To see the likely range's numbers instead, click "Full range" in the legend to hide it – click again to bring it back. Any band can be hidden or shown the same way.

Risk of running out, year by year

Methodology, Assumptions & Disclosures

How this calculator works. Your starting portfolio and withdrawal plan are run through 5,000 simulated market scenarios – different sequences of good and bad months, all drawn from the same expected return and volatility – and the results show how often the plan lasts and the realistic range of where it could end up. The simulation is seeded: rather than re-rolling the dice on every visit, the same inputs always reproduce the same 5,000 scenarios, so your results are stable, comparable, and repeatable.
How the Simulation Works

Monthly steps, lognormal returns. Each scenario draws a random return every month from a lognormal distribution centred on the portfolio's expected compound return, scaled to its volatility – the standard approach in professional planning software. The median simulated path matches steady-rate math, so the bands isolate what volatility alone does.

Withdrawal mechanics. Monthly and quarterly withdrawals come out at the end of each period. Annual withdrawals come out at the start or end of the year, as selected. Dollar withdrawals optionally rise with inflation each year; percentage withdrawals take the chosen fraction of whatever the balance is at each payment. A scenario "fails" the moment its balance cannot cover a dollar withdrawal; failed scenarios stay at zero.

Inflation is applied two ways. "Increase withdrawals with inflation" raises your dollar withdrawal each year so your lifestyle keeps pace. "Today's dollars" translates every future value back into current purchasing power at your assumed inflation rate – the bigger "Future dollars" numbers are what a statement would show, not what the money buys.

Seeded and reproducible. The random draws come from a seeded generator, so identical inputs always produce identical results. Changing only your withdrawal replays the very same 5,000 market scenarios – differences you see come from the plan change, not from a fresh roll of market luck.

Return Assumptions & Sources
  • Expected returns: reported in CAD, compounded and annualized, before inflation. 100% Equity: 8.0%, 80/20: 7.0%, 60/40: 6.0%, 40/60: 5.0%, 20/80: 4.2%.
  • Volatility (annual standard deviation): 100% Equity: 15%, 80/20: 12.5%, 60/40: 10%, 40/60: 8%, 20/80: 6%.
  • These are forward-looking estimates, not guarantees – actual returns, volatility, and inflation will differ from any assumption.
  • Not modelled: taxes, account types (RRSP/RRIF, TFSA, non-registered), RRIF minimum withdrawals, government benefits (CPP/OAS), rebalancing, and portfolio changes over time.
GIC Rates & Sources
  • Source: Bank of Canada posted chartered-bank rate for 5-year personal fixed terms (series V80691336), also published in "Selected Historical Canadian Dollar Interest Rates."
  • History used: the weekly series averaged by calendar year, 1968 to 2025 – 58 annual values embedded in this page, from the 14.9% average of 1981 down to the 0.8% average of 2021.
  • How it's simulated: your first 5-year term locks at the rate you enter. At each renewal, the scenario draws one year's average rate from the history and locks it for the next five years. Within a term there is no volatility – GIC uncertainty is renewal risk, not market risk.
  • Ladder assumption: the portfolio behaves like a 5-year GIC ladder, so withdrawals remain possible between renewals without early-redemption penalties.
  • Caveats: posted rates often sit below the promotional and broker rates actually available – enter the rate you're offered for a fairer first term. And the history includes the double-digit early 1980s; past rates don't predict future ones.
Important Disclosures
  • This calculator is an illustration of the assumptions entered – not a projection, a forecast, a recommendation, or a guarantee of any outcome.
  • It is provided for educational purposes only and does not constitute financial, investment, tax, or legal advice.
  • Results are hypothetical simulations. Simulated scenarios are mathematical constructs – they do not represent actual market history or any actual investor's experience.
  • Past performance is not indicative of future results. This applies equally to the historical GIC rates used by the GIC option.
  • Expected returns and volatilities are forward-looking estimates that will differ from actual results. Real returns arrive unevenly, and no portfolio mix assures any outcome.
  • Taxes and account types are not modelled; individual circumstances will materially change real-world outcomes.
  • GICs and investment portfolios differ in guarantees: GIC principal and interest are typically covered by CDIC deposit insurance within its limits, while market portfolios can lose value. This tool compares simulated outcomes only, not product features.
  • A withdrawal plan should be revisited regularly as life, markets, and rates move – a one-time simulation is a starting point for a conversation, not a set-and-forget answer.
  • Consult a qualified Investment Advisor before acting on any result shown here.
  • No data is stored, transmitted, or shared – all calculations run locally in your browser.
Terms of Use

This does not constitute financial advice. You will need to consult a qualified Investment Advisor to obtain financial advice. The output of these tools are a direct result of assumptions chosen by the user, and do not necessarily represent the views of De Thomas Wealth Management Corp.

This tool is published by De Thomas Wealth Management Corp. for your information only. Information on which this document is based is available on request. Particular investments or trading strategies should be evaluated relative to each individual's objectives, in consultation with the Investment Advisor. Opinions of De Thomas Wealth Management constitute its judgment as of the date of this publication, are subject to change without notice and are provided in good faith but without responsibility for any errors or omissions contained herein. This document is supplied on the basis and understanding that neither De Thomas Wealth Management Corp. nor its employees, agents or information suppliers is to be under any responsibility of liability whatsoever in respect thereof.

© De Thomas Wealth Management. All rights reserved.

FAQ

What is a Monte Carlo retirement simulation?
Instead of assuming one steady return, a Monte Carlo simulation runs a plan through thousands of possible market sequences – strong runs, weak runs, and everything between – and reports how often it survives. It's the standard professional method for stress-testing a withdrawal plan, because averages hide the order returns arrive in.
What is a good Monte Carlo success rate?
Many planners treat roughly 80–95% as a comfortable zone; below about 70% usually calls for adjustments. Chasing 100% has a cost too – it often means spending less than you safely could. Willingness to trim spending in bad years lets a lower number remain reasonable.
What is sequence-of-returns risk?
Two retirees can earn the same average return and end up in completely different places if the bad years arrive in a different order. Withdrawing through a downturn locks losses in, so early-retirement bear markets hurt far more than late ones – the risk this simulator exists to measure.
Is the 4% rule safe in Canada?
The 4% rule – withdraw 4% of the starting portfolio, indexed to inflation – comes from historical US research and is a starting point, not a guarantee. Its safety depends on your horizon, mix, and flexibility; you can test it directly here by entering a 4% withdrawal and your own assumptions.
Are GICs safer than stocks for retirement income?
Safer in one sense – a GIC never has a down year, and deposits are typically CDIC-insured within limits. But "safe" income that doesn't keep pace with inflation carries its own risk, and renewal rates are unknown. Switch this simulator's portfolio to the GIC option and compare success rates directly against a balanced mix.
What is a safe withdrawal rate for a 30-year retirement?
Research puts the historical starting point near 4% of the portfolio, indexed to inflation – but the honest answer varies with your mix, your timing luck, and how flexible your spending can be. Enter your own numbers here and let 5,000 scenarios answer for your plan instead of an average retiree's. For the tax-and-benefit side of the same question, see our Retirement Planner.
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© De Thomas Wealth Management Corp. All rights reserved. All calculations run locally in your browser – nothing you enter is stored or transmitted.