Monte Carlo simulation — compare three principled drawdown strategies
Mortgage
£
Remaining mortgage balance today
yrs
Years left on the mortgage as of now
%
Annual rate on your current fixed deal
Month your fixed rate expires and resets
%
Estimated rate after the deal resets
Windfall & Initial Split
£
Total lump sum available to deploy
£
Lump sum paid off the mortgage at the outset. Reduces both the outstanding balance and the investable windfall. Set to 0 to invest the full windfall.
%
Percentage of windfall placed into investments at the start; remainder goes to savings
Savings & Investments
%
Annual interest rate on your savings pot
%
Expected annual nominal return on investments (base case)
%
Annual standard deviation — S&P 500 five-year average is ~21%
Strategy 1 Funding Ratio
Desired ratio of total pot to present value of remaining obligations. 1.3 = hold 30% above what you strictly owe
Width of the zone around the target within which withdrawal fraction scales smoothly between savings- and investment-heavy
Strategy 2 Constant Mix
%
Target share of total pot to keep in investments at all times. Withdrawals rebalance back toward this each month. Merton-derived value at 6% return, 15% vol, moderate risk aversion ≈ 67%
Strategy 3 Bucket / Liquidity Floor
mths
Months of mortgage payments to keep in savings as a cash buffer. Draw from investments when buffer is healthy; fall back to savings when it thins
Additional Contributions
£
Amount added per contribution event. Set to 0 to disable
Which pot receives the contribution
How often the contribution is made
Simulation
More = smoother charts, slower. 500–1000 is a good browser balance