Skip to Main Content
HBS Home
  • About
  • Academic Programs
  • Alumni
  • Faculty & Research
  • Baker Library
  • Giving
  • Harvard Business Review
  • Initiatives
  • News
  • Recruit
  • Map / Directions
Faculty & Research
  • Faculty
  • Research
  • Featured Topics
  • Academic Units
  • …→
  • Harvard Business School→
  • Faculty & Research→
Publications
Publications
  • January 2021
  • Case
  • HBS Case Collection

The FIRE Savings Calculator

By: Michael Parzen and Paul J. Hamilton
  • Format:Print
  • | Language:English
  • | Pages:13
ShareBar

Abstract

This case follows Carol Muñoz, a member of the Financial Independence, Retire Early (FIRE) lifestyle movement. At the age of 45, Carol is considering retiring and living off the $1 million she has accumulated. Using Monte Carlo simulation, Carol forecasts the probabiliy her savings will last until age 80 depending on how her money is split over different financial instruments (stocks, bonds, etc.). Throughout the case, she runs the simulations under different scenarios and parameters. This allows students to explore uncertainty, probability distributions, statistical simulations, and the risk-return tradeoff and how it affects capital preservation and growth. The case is accompanied by a Jupyter notebook that allows students to work through Carol's analyses in the R statistical programming language.

Keywords

Analysis; Forecasting and Prediction; Financial Strategy; Investment Portfolio; Investment Return; Personal Finance; Saving; Risk and Uncertainty; Diversification; Theory; Financial Services Industry

Citation

Parzen, Michael, and Paul J. Hamilton. "The FIRE Savings Calculator." Harvard Business School Case 621-087, January 2021.
  • Educators

About The Author

Michael I. Parzen

Technology and Operations Management
→More Publications

More from the Authors

    • March 2022 (Revised March 2022)
    • Faculty Research

    Prediction & Machine Learning

    By: Iavor I. Bojinov, Michael Parzen and Paul J. Hamilton
    • March 2022 (Revised March 2022)
    • Faculty Research

    Linear Regression

    By: Iavor I. Bojinov, Michael Parzen and Paul J. Hamilton
    • March 2022 (Revised March 2022)
    • Faculty Research

    Statistical Inference

    By: Iavor I. Bojinov, Michael Parzen and Paul J. Hamilton
More from the Authors
  • Prediction & Machine Learning By: Iavor I. Bojinov, Michael Parzen and Paul J. Hamilton
  • Linear Regression By: Iavor I. Bojinov, Michael Parzen and Paul J. Hamilton
  • Statistical Inference By: Iavor I. Bojinov, Michael Parzen and Paul J. Hamilton
ǁ
Campus Map
Harvard Business School
Soldiers Field
Boston, MA 02163
→Map & Directions
→More Contact Information
  • Make a Gift
  • Site Map
  • Jobs
  • Harvard University
  • Trademarks
  • Policies
  • Accessibility
  • Digital Accessibility
Copyright © President & Fellows of Harvard College