Vanguard offers a "Retirement Nest Egg Calculator" for projecting the effects over time of portfolio weighting and spending rate. The calculator found here projects into the future how a portfolio will perform using monte carlo simulation from historical data. It can estimate up to 50 years in the future for someone wanting to retire early in their 40s. You specify your portfolio mix of stocks, bonds, and cash, and your yearly expenses, and it will estimate the likelihood of running out of money by the termination date. It also shows how the portfolio will grow over time. The portfolio returns are based on diversified returns from index funds. One thing to keep in mind when estimating yearly expenses is to include income tax on top of the spending rate if pulling cash out of a 401k or IRA.
This tool is a great way to show the power of compounding for the projected net worth. The projected net worth shows exponential growth in later years as wealth compounds. The further you go out the numbers begin to reach astronomical values.
