How the numbers are worked out
Every figure on your plan comes from your own answers and the assumptions below. Skim the bold lines for the whole picture.
What this tool does
An illustrative calculation from your answers. Not a forecast, not a recommendation.
Europa is an educational financial-planning calculator. It uses your answers to show illustrative calculations and to explain financial terms in plain language. The results rest on simplified assumptions. They are neither a forecast nor a personal recommendation.
The calculator does not judge which investment is suitable for you. It manages no money, carries out no transactions, and gives no instruction to buy or sell financial products. Consider taking regulated advice before making an investment decision.
The order it follows
Safety net first, then expensive debt, then your goals and retirement together.
You put the roof on a house before you decorate. A cash cushion stops one bad month undoing everything else, and a debt charging more than the plan assumes investing earns costs you more than investing gains. Both come first for the same reason.
| Threshold | Value | What it does |
|---|---|---|
| Safety net | 3 months | Months of essential spending held in cash before investing starts. |
| Expensive debt | 8.0% | Above this rate, a debt that is not a mortgage takes every spare euro until it is gone. |
| Middling debt | 6.0% | Between this rate and the one above, a debt takes half the spare money and the safety net takes the rest. |
| Retirement floor | €100 | Kept flowing to retirement each month even while the safety net and debt are being dealt with. |
A mortgage is outside all three. It takes its minimum payment whatever the rate, because clearing it early is rarely the best use of a euro and the plan does not pretend otherwise.
While you pay off an expensive debt, we keep a small €100 retirement habit going. Paying the debt with that €100 would save slightly more. We keep the habit because starting is the hardest part.
How the money is split between goals
Each goal first gets what it needs to arrive on time. If there is not enough, the shortfall is shared in proportion.
A goal is never given more than it needs. Once a goal is on track, anything above its required payment goes to the others rather than overshooting.
Worked example, computed by the same engine your plan runs on:
Age 34, €3,800 a month after tax, €2,200 of essential spending, €600 a month to invest.
- Flat deposit: €40,000 in 8 years needs €359 a month, and is given €181.
- University fund: €30,000 in 12 years needs €163 a month, and is given €115.
- Retirement at 67: €660,000 needs €722 a month, and is given €304.
The parts add up to the €600 that was available, to the euro.
Where the retirement target comes from
25 times your yearly essential spending.
That is the same thing as the "4% rule": a pot you take about 4.0% out of each year. It is a rule of thumb from research on past US markets, not a guarantee and not a law. It is used here because it is simple enough to check and well known enough to argue with.
It is built on your ESSENTIAL spending rather than your whole income, so it answers "what would keep the lights on" rather than "what would keep my life exactly as it is".
The rule has been tested outside the United States, and it did not hold up. One study looked at 109 years of data for 17 developed countries, with each country’s retirees holding their own country’s market. Four percent survived in only 4 of them. An even split between stocks and bonds survived in none. The worst case was someone retiring in Japan in 1940, for whom the safe rate was 0.47%.
That study did not test a portfolio spread across the world, and says so. Spreading money more widely is one of the things it lists as able to raise the safe rate. So the honest reading is narrower than the headline: a plan built on one country’s market has been far riskier than four percent suggests, and this one is not built that way. A more cautious plan would use a bigger multiple than 25.
No state pension is counted. If you have built up entitlements, the amount you need to save yourself is lower than the figure shown.
Why everything is in today’s money
€100 today and €100 in thirty years do not buy the same basket of shopping. Everything here is shown at today’s prices so it can be compared with your life now, and so that a target you typed today can be held against a projection without the two being in different units.
The arithmetic is one line. About 7.0% expected growth for shares, less about 2.0% for rising prices, is about 4.9% a year in today’s money. It is a division rather than a subtraction, which is why the result is not exactly the difference between the two.
The other half of it is the monthly amount. A flat figure in today’s money assumes you raise what you pay in with prices each year. That is what most people can actually commit to, and it is why the contribution is not grown in the arithmetic.
The yearly raise
The plan assumes you raise your monthly amount by about 2.0% each year. If you do not, you end up with less.
Keeping the same number of euros going in every year is not keeping the same amount going in. Prices rise, so a level payment buys a little less each year, and the plan would be flattering you if it pretended otherwise.
On the same example profile: about €429,000 at 67 if the monthly amount is raised each year, and about €327,000 if it stays the same number of euros.
The growth rates, and where they come from
Five building blocks, each with a rate before inflation, a rate after it, and how bumpy it is.
What the model is made of
The plan never reasons about a fund. It reasons about five roles a holding can play in a portfolio, and a separate table decides which fund fills each role in a given market. That separation is why the same model can be pointed at another country without any of the arithmetic changing.
| Role | Before inflation | After inflation | Assumed volatility |
|---|---|---|---|
| Global shares | 7.0% | 4.9% | 16.0% |
| Government loans, 1–3 years | 2.5% | 0.5% | 2.0% |
| Government loans, 3–7 years | 2.8% | 0.8% | 3.5% |
| Government loans, 7–10 years | 3.0% | 1.0% | 5.0% |
| Cash and near-cash | 1.5% | -0.5% | 0.4% |
These are the only hand-set numbers in the model; every portfolio figure is a weighted blend of them. They are long-horizon planning assumptions, not forecasts, and they are published here before inflation: broad global equity around seven percent, government bonds rising with maturity, cash a little above nothing. The figures the model projects at are those same numbers after inflation, which is what the column above shows. The three bond figures rise with maturity because the term premium is the only reason to hold the longer ones.
These are deliberately cautious long-run assumptions. They are not a forecast of any particular year, and no year will look like them. A single year can be far better or far worse, and some years are negative.
Every projection uses one rate for every year. Real markets do not work that way. A straight line is easy to check and easy to argue with, which a cloud of possible outcomes is not.
The seven mixes
Each mix blends the building blocks above. The more it holds in stocks, the higher the assumed rate and the bumpier the ride.
There are 7 of them, evenly spaced from no shares at all up to 90%. Each one is defined as a weight per role and nothing else; its expected return, its volatility and its risk level are all computed from that vector.
| Plan | Stocks | Government loans | Cash | Before inflation | After inflation | Europa risk level |
|---|---|---|---|---|---|---|
| Secure | 0% | 0% | 100% | 1.5% | -0.5% | 1 |
| Cautious | 15% | 60% | 25% | 2.9% | 0.9% | 3 |
| Defensive | 30% | 50% | 20% | 3.7% | 1.6% | 4 |
| Balanced | 45% | 45% | 10% | 4.6% | 2.5% | 4 |
| Progressive | 60% | 35% | 5% | 5.3% | 3.2% | 5 |
| Growth | 75% | 25% | 0% | 6.0% | 3.9% | 5 |
| Adventurous | 90% | 10% | 0% | 6.6% | 4.5% | 5 |
The Europa risk level is not the plan’s position in this list. It is our own 1 to 7 scale, and this ladder does not reach its top two steps: each mix sits where its modelled ups and downs put it, worked out from the allocation rather than from any fund’s track record.
Which plan a goal lands on comes from its horizon, not from a questionnaire. The curve saturates towards the ceiling over roughly 8 years, which approximates how long an investor has historically had to be able to wait out a severe fall in share prices. Your answer to the question about a sudden fall can move a goal one step either way, and never past what its horizon allows.
The funds behind each role
These are the products the tool uses to express each role in Europe and the UK. They are listed in full here, with the detail the plan itself leaves out, because the terms below each need a definition before they mean anything and a goal card is the wrong place for one.
Naming them is not a recommendation to buy them. Nothing is bought here, no account exists, and no one has assessed whether any of them suits you.
Global shares
Vanguard FTSE All-World UCITS ETF (USD) Accumulating
- ISIN
- IE00BK5BQT80
- Ongoing cost a year
- 0.19%
- Where the fund is registered
- Ireland
- Regulatory structure
- UCITS. A European fund standard that sets rules on diversification, on how assets are held separately from the manager, and on how often the fund can be bought and sold. It says nothing about whether a fund is suitable or how it will perform.
- What happens to the income
- Reinvested inside the fund automatically.
Government loans, 1–3 years
iShares Euro Government Bond 1-3yr UCITS ETF (Acc)
- ISIN
- IE00B3VTMJ91
- Ongoing cost a year
- 0.10%
- Where the fund is registered
- Ireland
- Regulatory structure
- UCITS. A European fund standard that sets rules on diversification, on how assets are held separately from the manager, and on how often the fund can be bought and sold. It says nothing about whether a fund is suitable or how it will perform.
- What happens to the income
- Reinvested inside the fund automatically.
Government loans, 3–7 years
iShares Euro Government Bond 3-7yr UCITS ETF (Acc)
- ISIN
- IE00B3VTML14
- Ongoing cost a year
- 0.15%
- Where the fund is registered
- Ireland
- Regulatory structure
- UCITS. A European fund standard that sets rules on diversification, on how assets are held separately from the manager, and on how often the fund can be bought and sold. It says nothing about whether a fund is suitable or how it will perform.
- What happens to the income
- Reinvested inside the fund automatically.
Government loans, 7–10 years
iShares Euro Government Bond 7-10yr UCITS ETF (Acc)
- ISIN
- IE00B3VTN290
- Ongoing cost a year
- 0.15%
- Where the fund is registered
- Ireland
- Regulatory structure
- UCITS. A European fund standard that sets rules on diversification, on how assets are held separately from the manager, and on how often the fund can be bought and sold. It says nothing about whether a fund is suitable or how it will perform.
- What happens to the income
- Reinvested inside the fund automatically.
Cash and near-cash
iShares EUR Government Bond 0-1yr UCITS ETF
- ISIN
- IE00B3FH7618
- Ongoing cost a year
- 0.07%
- Where the fund is registered
- Ireland
- Regulatory structure
- UCITS. A European fund standard that sets rules on diversification, on how assets are held separately from the manager, and on how often the fund can be bought and sold. It says nothing about whether a fund is suitable or how it will perform.
- What happens to the income
- Paid out to the holder rather than reinvested.
Irish registration is a tax choice, not a statement about where a fund invests. Ireland’s treaty with the United States lets a fund resident there reclaim more of the tax withheld on American dividends, which for a global share fund is worth more than the management fee. It matters to the share fund and not at all to the euro government bond funds, which receive no American dividends.
The cost shown is the figure in each fund’s own key information document. Where a provider’s website quotes a lower number after a fee cut, the higher published figure is used until the document catches up: understating a cost is the wrong direction to be wrong in.
What the projections do and do not include
- They are straight-line illustrations at a constant assumed return, stated in today’s money. Real returns vary year to year and include losing years; the shape is the point and the figure is an illustration.
- Returns are stated before costs. The weighted cost of holding a mix is shown beside it so the two can be compared, but no projection subtracts it.
- Inflation IS allowed for: every rate is a real rate and every projected figure is in today’s money. No allowance is made for tax, or for what a platform charges to hold the funds.
- German tax and pension treatment is not modelled. There is no Riester, no Vorabpauschale and no statutory pension offset, whichever language the plan is read in.
- Contributions are assumed to arrive at the start of each month and to continue at the stated rate until a goal is reached. Because the figures are in today’s money, a flat monthly amount means raising what you pay in with prices each year.
The emailed document
The PDF is the same plan, recomputed on the server from the answers you gave rather than copied from the screen, so the two cannot disagree. It contains no text written by a language model: the prose in it is fixed and its figures come from the calculator. The short summaries on the results screen are AI-written and are marked as such wherever they appear.
What happened in the past
Context, not a promise. None of it is used to work out your plan.
Since the end of 1998, global shares (MSCI ACWI Index (EUR), in euros, before costs and tax) grew about 7.8% a year. After inflation that is about 5.6% a year, using euro-area consumer prices over 1998-12 – 2025-12. That period includes a fall of 56.2% between Aug 31, 2000 and Mar 12, 2003.
The last ten years were unusually strong, at about 12.8% a year. We do not use those years to set the plan, because a strong decade is not a promise of the next one.
This plan assumes 7.0% before inflation, which is 4.9% after. That is a little below the long-run history, on purpose.
For comparison, one large asset manager — J.P. Morgan Asset Management, 2026 Long-Term Capital Market Assumptions (U.S. dollar assumptions) — expects about 7.0% a year from global shares over 10-15 years. That figure is in USD and before inflation, which is not the same unit as the rate this plan runs on.
There is no bond history here. No index provider publishes a euro government bond return going back that far outside a paid service, and a figure that cannot be checked does not belong on this page.
Past results do not promise future ones.
Europa risk level
A 1 to 7 scale for how bumpy the road is, not for where it ends.
The level comes from how much a mix has moved up and down in a typical year. A higher level does not mean a worse outcome or a better one. It means a rougher ride on the way.
The seven mixes only reach levels 1 to 5. The levels above that need swings this model does not go near, and a scale that stops responding halfway up would read as broken.
This is our scale, not an industry one, which is why it is named after us.
A fund’s own information sheet, the KID, also uses a 1 to 7 scale. It is worked out differently, so its number may differ from ours.
Measured: the KID for Vanguard FTSE All-World UCITS ETF (USD) Accumulating puts it at 4 of 7. The same holding, all in shares, is level 6 on our scale, and the boldest mix we offer is level 5. Theirs looks at how much you could lose over 5 years. Ours looks at how much the value moves about in a typical year.
The Europa risk level is not the plan’s position in this list. It is our own 1 to 7 scale, and this ladder does not reach its top two steps: each mix sits where its modelled ups and downs put it, worked out from the allocation rather than from any fund’s track record.
What the model leaves out
Several real things. Each one makes the figures look better than life, except where noted.
- Tax on investment income and gains. Nothing on your plan is after tax.
- Fund costs and platform fees. The category list shows a typical yearly cost, but no projection subtracts it.
- German tax and pension rules. "How to read this" at the foot of your plan lists what is missing.
- Taking money out before the goal date. The plan assumes nothing is withdrawn early.
- We add growth monthly, using one twelfth of the yearly rate. Twelve of those add up to slightly more than the yearly rate shown: 4.9% a year grows at 5.0%. It makes the figures a little higher than the stated rate would give, not lower.
- The order returns arrive in. Two people with the same average return can end up with different amounts, and this model cannot show that.
- Everything that is not a number you typed. A job change, a child, an inheritance, an illness.
- Any state pension. The retirement figure assumes you fund the whole target yourself.
Sources
Every outside figure on this page, with where it came from and when it was checked.
| Source | As of | Open the source |
|---|---|---|
| MSCI ACWI Index (EUR) factsheet | Sep 30, 2026 | Open the source |
| ECB Data Portal — ICP.M.U2.N.000000.4.INX (Eurostat HICP, overall index, 2015 = 100) | Dec 31, 2025 | Open the source |
| J.P. Morgan Asset Management, 2026 Long-Term Capital Market Assumptions (U.S. dollar assumptions) | Sep 30, 2025 | Open the source |
| Wade D. Pfau, "An International Perspective on Safe Withdrawal Rates: The Demise of the 4 Percent Rule?", Journal of Financial Planning, December 2010 | Dec 1, 2010 | Open the source |
| Vanguard FTSE All-World UCITS ETF (USD) Accumulating — PRIIPs Key Information Document | Sep 29, 2026 | Open the source |
Last checked: Oct 19, 2026
This page is generated from the model itself, so it changes when the model does.