Probability of Ruin Calculator
Free probability of ruin calculator runs Monte Carlo simulation for constant withdrawal retirement to output ruin probability, success and safe withdrawal rate.
How It Works
Enter the inputs described in each field label for Probability of Ruin Calculator. Adjust the inputs above to see how changes affect the projection.
Probability of ruin estimates the chance a portfolio depletes before the planning horizon under lognormal return assumptions. Use Monte Carlo FIRE, SWR Dynamism, and Sequence of Returns on portfolios.tools for retirement withdrawal research. Numbers update instantly so you can pressure test assumptions quickly.
Use Monte Carlo FIRE, SWR Dynamism, and Sequence of Returns on portfolios.tools for retirement withdrawal research.
Bookmark the page for quick reruns without installing software.
Step by step
- Open Probability of Ruin Calculator and enter your current inputs.
- Review calculated outputs and summary tables.
- Adjust assumptions and compare scenarios side by side.
Worked example
Adjust one input at a time to see sensitivity.
Common mistakes
Confirm tickers, percentages, and dates before acting.
Running a single baseline scenario ignores tail risks.
The Formula
Each year: Portfolio = (Portfolio − Withdrawal) × (1 + Return)
Ruin if Portfolio ≤ 0 before horizon ends
Uses fixed nominal withdrawals without inflation adjustment. Sequence of returns risk dominates real world outcomes.
Limitations and assumptions
Uses fixed nominal withdrawals without inflation adjustment. Sequence of returns risk dominates real world outcomes. Probability of Ruin Calculator does not replace personalized advice.
Key terms
- What does Probability of Ruin Calculator measure
- Probability of ruin estimates the chance a portfolio depletes before the planning horizon under lognormal return assumptions.
- How is the formula applied
- The formula block on this page shows every intermediate step so you can audit the math against textbook definitions.
- Model assumption
- Interpret results in context rather than as automatic buy, sell, or accept signals.
Compare alternatives
Use Monte Carlo FIRE, SWR Dynamism, and Sequence of Returns on portfolios.
FAQ
What does Probability of Ruin Calculator measure?
Probability of ruin estimates the chance a portfolio depletes before the planning horizon under lognormal return assumptions. This calculator runs entirely in your browser on portfolios.tools. The formulas and any bundled reference data are documented below.
How is the formula applied in Probability of Ruin Calculator?
Uses fixed nominal withdrawals without inflation adjustment. Sequence of returns risk dominates real world outcomes. You can change any input and rerun the calculation as many times as you like. Comparing scenarios side by side is the most reliable way to understand how sensitive the result is to each assumption.
How should I interpret Probability of Ruin Calculator results?
Probability of ruin estimates the chance a portfolio depletes before the planning horizon under lognormal return assumptions.
What are common input mistakes with Probability of Ruin Calculator?
Stress test with conservative and optimistic inputs before acting. Document assumptions when sharing outputs with colleagues or clients.
What are the limitations of Probability of Ruin Calculator?
Uses fixed nominal withdrawals without inflation adjustment. Sequence of returns risk dominates real world outcomes.
Related Tools
Use Monte Carlo FIRE, SWR Dynamism, and Sequence of Returns on portfolios.tools for retirement withdrawal research.