Saving Rate Comparison
Lawyer in Romania
Simulation Overview
Base scenario assumptions
- The simulation starts at age 30 and runs until age 65.
- The initial annual income is €18,000.
- Income grows annually at an average rate of 3%.
- An income tax rate of 10% is applied to gross income.
- The saving rate varies between 5% and 25%.
- Minimum annual living expenses are €9,000.
- Savings are invested with stochastic annual returns.
- The average annual return is 6%, with year-to-year variability.
- All values are expressed in real terms, assuming average annual inflation of 3%.
- The simulation includes stochastic life events such as unemployment, and health issue.
- These events may temporarily affect income, expenses, or net worth.
- Financial independence is defined as having net worth equal to 25 times annual expenses.
- Bankruptcy is triggered if net worth remains below €0 for 2 consecutive years.
Scenario Comparison
Results are shown as a realistic range. P10 represents a pessimistic outcome, while P90 represents an optimistic outcome.
| Scenario | Median Net Worth | P10 Net Worth | P90 Net Worth | FI Probability | FI Median Age |
|---|---|---|---|---|---|
| 5% | 128,249.45999999999 | 81,706.524 | 201,677.393 | 6% | 63 |
| 10% | 256,498.925 | 163,413.05599999998 | 403,354.786 | 65% | 61 |
| 15% | 384,748.39 | 245,119.58000000002 | 605,032.18 | 94% | 57 |
| 20% | 512,997.85 | 326,826.104 | 806,709.5730000001 | 99% | 54 |
| 25% | 641,247.315 | 408,532.637 | 1,008,386.9660000001 | 100% | 51 |
How Your Financial Life Evolves
These charts show how each scenario affects long-term outcomes, including expected wealth, downside risk, and the likelihood of achieving financial independence.
Net Worth Median
Net Worth Range
Fi Probability
Fi Median Age
