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 5%, 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% | 106,195.11499999999 | 68,008.526 | 165,201.452 | 2% | 63 |
| 10% | 212,390.22 | 136,017.043 | 330,402.895 | 44% | 61 |
| 15% | 318,585.33499999996 | 204,025.56900000002 | 495,604.346 | 86% | 59 |
| 20% | 424,780.445 | 272,034.09599999996 | 660,805.798 | 97% | 55 |
| 25% | 530,975.5549999999 | 340,042.613 | 826,007.2409999999 | 99% | 53 |
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
