The Hidden Flaw in Monte Carlo Analysis That's Ruining Retirement Plans

Video Description

Many retirees focus on achieving a high Monte Carlo “probability of success” in retirement—but is chasing a 99% success rate always the best move? In this episode, James highlights a real-life story of a man forced to delay retirement after a divorce dropped his probability of success from 99% to 70%. James explores why this single number shouldn't drive such massive decisions. He explains how context—like income sources, spending flexibility, and home equity—matters more than a static success rate. You’ll learn why 100% isn’t always ideal, and how to build a retirement plan that supports a meaningful life, not just a perfect score. Questions answered? 1. Should I delay retirement if my Monte Carlo probability of success drops? 2. Is a 100% probability of success the best goal for my retirement plan? ======================= Work with us → https://www.rootfinancial.com/start-here/ Check out our Root Financial Youtube Channel → https://www.youtube.com/channel/UCopKwWs9ea1dAOxqZOqBjpg Get access to the retirement software I use and more → https://retirement-planning-academy.mykajabi.com/rpa _ _ ⏱Timestamps:⏱ 0:00 - An encounter at the gym 2:37 - What is Monte Carlo analysis? 4:18 - Consider severity of failure 6:19 - Consider other assets, like property 7:35 - Is a 100% probability score really success? 10:55 - Monitor and course correct 14:13 - Margin 15:07 - No universal number 16:13 - Assumptions about spending 18:27 - Retirement spending smile 20:57 - Context matters -- Advisory services are offered through Root Financial Partners, LLC, an SEC-registered investment adviser. This content is intended for informational and educational purposes only and should not be considered personalized investment, tax, or legal advice. Viewing this content does not create an advisory relationship. We do not provide tax preparation or legal services. Always consult an investment, tax or legal professional regarding your specific situation. The strategies, case studies, and examples discussed may not be suitable for everyone. They are hypothetical and for illustrative and educational purposes only. They do not reflect actual client results and are not guarantees of future performance. All investments involve risk, including the potential loss of principal. Comments reflect the views of individual users and do not necessarily represent the views of Root Financial. They are not verified, may not be accurate, and should not be considered testimonials or endorsements. Participation in the Retirement Planning Academy or Early Retirement Academy does not create an advisory relationship with Root Financial. These programs are educational in nature and are not a substitute for personalized financial advice. Advisory services are offered only under a written agreement with Root Financial.