A Monte Carlo simulation is a model used to predict the probability of different outcomes when the intervention of random variables is present. Monte Carlo simulations help to explain the impact of risk and uncertainty in prediction and forecasting models. - Investopedia

Why does talking about this matter? What does it have to do with financial planning?

• If you have financial goals (short or long term) you likely want to know the chance of actually being able to reach those goals. A Monte Carlo simulation or analysis can give you one of the best insights into your goals, like not running out of money in retirement.

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