Retirement isn’t just about numbers—it’s about dreams, timing, and the courage to take the leap. For Bob and Barbara, a couple from Kentucky with a lifetime of memories and a love for adventure, the question was simple: Can we afford to retire now and live the life we’ve imagined?

To find out, we ran a Monte Carlo simulation using historical S&P 500 returns. But before we dive into the data, let’s meet the couple behind the numbers.

‍❤️‍ Meet Bob and Barbara

Bob and Barbara met in college in the late 1980s—he was studying mechanical engineering, she was majoring in early childhood education. They married soon after graduation and built a life rooted in love, hard work, and family.

• Bob spent over 30 years as a senior project manager in construction. He loved solving problems and mentoring young engineers.
• Barbara taught kindergarten for nearly three decades, creating a classroom full of laughter, learning, and glitter.
• They raised two children—Emily, a graphic designer, and Jake, a firefighter—and are now proud grandparents.
• Weekends were filled with fly fishing, gardening, book clubs, and camping trips.
• Their dream? A cross-country road trip in a vintage Airstream, exploring national parks and quirky roadside diners.

The Porch Talk That Changed Everything

One crisp October evening, Bob and Barbara sat on their back porch, sipping cider and watching the sunset. Bob’s knees ached from a long day at work. Barbara couldn’t stop thinking about their grandkids’ visit the weekend before.

“What if we didn’t wait anymore?” Barbara asked. “What if we actually did it—retired, I mean?”

Bob nodded. “We’ve worked hard. We’ve saved. Maybe it’s time to start living the next chapter.”

That night, they toasted to the future. The next morning, they called their financial advisor.

The Financial Snapshot

Here’s what their retirement plan looks like:

• Ages: Bob is 61, Barbara is 60
• Retirement Horizon: 30 years (to age 90)
• Assets:
  • High-yield savings: $100,000
  • Brokerage account: $550,000
  • Traditional IRA: $600,000
  • Total: $1.25 million
• Social Security (starting at 67):
  • Bob: $45,000/year
  • Barbara: $22,500/year
  • Total: $67,500/year
• Living Expenses:
  • Ages 61–79: $100,000/year
  • Ages 80–90: $85,000/year
• Inflation: 3% annually
• Investment Returns: Based on historical S&P 500 data (1920–2020)

Monte Carlo Simulation: A Peek Into 10,000 Futures

Monte Carlo simulations use historical data to model thousands of possible financial futures. Here’s how we approached it:

1. Return Sampling: Randomly selected annual returns from 100 years of S&P 500 history.
2. Sequence Risk: Captured the impact of early market losses.
3. 10,000 Simulations: Each one a different possible retirement path.
4. Withdrawal Strategy:
   • Spend from brokerage and savings first
   • Tap into the IRA later
   • Social Security starts at 67

The Results

• ✅ Success Rate: 82% of simulations showed their portfolio lasting through age 90
• Median Ending Portfolio: $1.1 million (in today’s dollars)
• ⚠️ Worst-Case Scenario: Funds depleted by age 78
• Best-Case Scenario: Portfolio grows to over $4 million

Bob and Barbara are in a strong position—but there’s room to improve.

Recommendations

1. Trim Spending: Reducing annual expenses by 5–10% could push their success rate above 90%.
2. Revisit Asset Allocation: A slightly higher equity exposure could improve long-term growth.
3. Smart Tax Moves: Strategically withdrawing from the IRA can reduce tax drag.
4. Plan for Healthcare: Long-term care costs can derail even the best plans—budget accordingly.