Income Tax Comparison
Retail worker in Romania
Simulation Overview
Base scenario assumptions
- The simulation starts at age 30 and runs until age 65.
- The initial annual income is €6,300.
- Income grows annually at an average rate of 2%.
- The income tax rate varies between 0% and 30%.
- The saving rate is set to 20%.
- 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, health issue, health issue, 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 |
|---|---|---|---|---|---|
| 0% | 141,568.425 | 87,322.638 | 229,609.69600000005 | 12% | 62 |
| 10% | 127,411.58499999999 | 78,590.37100000001 | 206,648.72600000002 | 8% | 62 |
| 20% | 113,254.745 | 69,858.10500000001 | 183,687.75500000003 | 5% | 63 |
| 30% | 99,097.9 | 61,125.847 | 160,726.78500000003 | 3% | 64 |
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
