To compute income estimates for use during retirement, the simulator algorithm uses the assumptions
submitted by the input form to determine the growth of principle and ongoing contributions over the duration
of two phases: accumulation and decumulation.

During the accumulation phase, principle and additional contributions are grown at the compound interest
rate. It is assumed that there are no withdrawls of principle during this phase. The length of the accumulation
phase is determined by taking the difference between the retirement age and current age submitted by the input form.

During decumulation, 68% of the accrued principle is divided into equal amounts for spending during retirement.
68% is selected to provide a margin of safety to account for extreme market volatility. During retirement,
which is computed as the difference in years between 85 and age at retirement submitted with the inputs form,
an annual withdrawl is made from the principle. The remaining principle is assumed to continue to grow at
the interest rate submitted with the input form. Note that this assumption may be difficult to achieve
in certain economic environments.

The algorithm then simluates 5000 iterations of the process described above using compound interest rates drawn
from a normal distribution with a mean equal to the interest rate submitted with the input form and a standard
deviation equal to the volatility submitted with the input form divided by 100.

High and low estimates, which cover 95% of simulation results, of savings growth are plotted along with the mean
to provide the user with a sense of how likely the mean result is to materialize, given the volatility estimate.

Estimated social security income is computed using standard rules provided by the Social Security Administration.
Information on this formula can be found here,
here, and
here. Note the current estimate does not
account for spouses or disability.

This tool is provided as is and may contain errors. This tool is not an official form of
financial advice. Use at your own risk!