How do you use monte carlo results to make decisions?
I recently switched my retirement/financial planning model from assuming a fixed 8% annual return to using Monte Carlo simulations.
One thing I’m still trying to get comfortable with is how to interpret the results. The range of outcomes is also surprisingly wide. I understand why mathematically, but I’m curious how people use that range when making actual planning decisions.
For those of you who use Monte Carlo, what percentile do you typically pay attention to? Do you mostly look at the median outcome, 25th percentile, 10th percentile, or something else?
u/Appropriate-Yak001 — 4 days ago