Utilizing a stock/bond allocation, annual withdrawal rate, and length of retirement, the model runs 10,000 random simulations of possible outcomes for a specific retirement period. The simulation starts with a beginning portfolio value then it randomly selects a monthly return series from monthly return data using the S&P 500 Index and Ibbotson Long Term Corporate Bond Index spanning back to January 1926. Once a month is chosen, all monthly return data for a specific month are drawn from that same month. Then the simulation takes a beginning portfolio value and multiplies it by a monthly return based on the allocation. The portfolio also subtracts an assumed fee rate of one twelfth of 125 basis points. Finally, a real withdrawal amount is calculated and subtracted from the portfolio value. Real withdrawal rates equal the monthly portion of the nominal withdrawal rate multiplied by a rolling value for the effect of inflation. After the real withdrawal rate is subtracted, the monthly portfolio value remains and is used as the beginning portfolio value for the next month. This process is repeated for the duration of the retirement. No taxes were taken into consideration. IMPORTANT: The projections or other information generated by the by the calculator regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results, and are not guarantees of future results. Results may vary with each use and over time.