Week 45 Day 5: The Probability of Ruin vs. the Magnitude of Ruin

A 90% success rate means 10% of scenarios end with you running out of money. But how badly? Running out at age 94 (one year short) is very different from running out at age 75 (20 years short). Monte ...

A 90% success rate means 10% of scenarios end with you running out of money. But how badly? Running out at age 94 (one year short) is very different from running out at age 75 (20 years short). Monte Carlo simulations usually report the probability of ruin but not its severity. You need to examine both.