# Monte Carlo Simulation of Retirement Savings with Variable Annual Return

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Monte Carlo simulation is useful for including variability in developing a model of a system. This simulation lets you see the impact of variability on the yearly percentage return for a retirement investment. Rather than using a fixed percentage return, this Demonstration uses a random sample from a triangular distribution to model the average return for each year. The triangular distribution is used since its parameter values (minimum, model, and maximum) allow one to account for the wide range of variability that can occur from year to year.

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Contributed by: Paul Savory (University of Nebraska-Lincoln) (March 2011)

Open content licensed under CC BY-NC-SA