What if you stop contributing five years before retirement?

Specific retirement question

This scenario measures the difference between contributing through retirement and pausing contributions five years before target retirement. The effect is often larger than expected because compounding has fewer years to contribute and compound.

This is a planning scenario only; it does not predict any personal outcome.

Inputs used

• Current age: 44
• Retirement target: 60
• Current savings: $620,000
• Monthly contribution until age 55: $2,200
• Monthly contribution after age 55: $0
• Expected return: 6.8%
• Inflation: 3.0%
• Annual spending: $60,000
• Withdrawal rate: 3.5%
• Volatility: 17%

Result summary

Continued contribution case: higher expected terminal portfolio and stronger safety margin.

Stop-at-55 case: projected portfolio at 60 is lower by several percentage points, with a reduced confidence buffer.

Estimated FIRE number: around $1.7M at 3.5% in both paths, but gap in portfolio outcomes matters.

Success rate: often falls roughly into low- to mid-60s in the stop-contribution variant.

This demonstrates that contribution timing can matter as much as return assumptions.

Tradeoff analysis

• Lost compounding: five non-contribution years remove both cashflow and growth contributions.
• Buffer pressure: spending flexibility becomes more important when contributions stop.
• Risk exposure: same volatility with lower assets amplifies sequence effects.

Monte Carlo interpretation

With fewer assets entering retirement, the simulation spread widens; early drawdowns can dominate outcomes. A lower success rate does not imply failure by design; it means this assumption set has less margin.

Use contribution timing decisions as one lever among withdrawal and spending behavior, then rerun the scenario.

Sensitivity notes

• Resume contributions for a shorter period and success can improve materially in later years.
• Reducing spending at retirement start by 5-10% improves margins faster than lowering volatility assumptions.
• Delaying retirement by one year often offsets some of the lost contribution years.

Common mistakes

• Assuming future contributions are optional without adjusting spending or timeline.
• Using a deterministic target without checking Monte Carlo sensitivity.
• Confusing a higher target as a better target instead of better runway risk control.