Your FIRE number and years to reach it.
FIRE number
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Years to financial independence
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The two questions FIRE really answers
Financial independence comes down to a target and a timeline. The target is the portfolio large enough that its withdrawals cover your spending forever. The timeline is how long your current savings plus monthly contributions take to reach it. This tool answers both. It sizes your number using a safe withdrawal rate, then runs your balance forward month by month, compounding it and adding your contribution each month until it crosses the line. The result is the year you can, in principle, stop working for money.
Where the 4 percent rule comes from
A 4 percent withdrawal rate is shorthand for the idea that a balanced portfolio can sustain annual withdrawals of about 4 percent of its starting value, adjusted for inflation, across a long retirement without running dry. Flip that fraction and you get the multiple: 4 percent means 25 times your annual spending. Drop the rate to a more cautious 3.5 percent and the multiple jumps to roughly 29 times. The original research was American and assumed a 30-year horizon, so Canadians retiring in their 40s with a 50-year horizon often dial the rate down a notch to build in margin.
A worked path to financial independence
Run the defaults: $50,000 of annual spending, a 4 percent withdrawal rate, $200,000 already invested, $2,500 added every month, and a 5 percent real return. The target is $50,000 divided by 0.04, which is $1.25 million. From $200,000, the projection reaches that target in 202 months, which the tool rounds to 16.8 years.
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The curve below shows why the back half moves faster. Early on, your contributions do most of the lifting. As the balance grows, compounding takes over, and the gap to $1.25 million closes far quicker in the final years than the first.
The Canadian wrinkle: CPP, OAS, and account mix
This tool gives you a single portfolio number, but a Canadian retiring early rarely needs the full amount from investments alone. CPP can begin as early as age 60, and OAS at 65, so a 45-year-old who retires today only has to self-fund the years before those benefits switch on. Government cheques in your 60s effectively lower the spending your portfolio must cover, which means your true FIRE number can sit below the headline figure. The account you save in matters too. TFSA withdrawals are tax-free and do not count as income, RRSP and RRIF withdrawals are fully taxable, and non-registered accounts sit in between with capital gains taxed at the 50 percent inclusion rate. A common error is planning around a pre-tax balance and forgetting that a chunk of every RRSP dollar belongs to the Canada Revenue Agency.
Frequently asked questions
Should I use a real return or a nominal return in this calculator?
Use a real return, which is the nominal return minus inflation, and the default of 5 percent already assumes that. The reason is that your spending target is in today’s dollars. If you mixed a nominal 7 percent return with a spending figure that ignores inflation, you would reach the number on paper while your actual purchasing power fell short. Keeping both sides in real terms keeps the answer honest.
What about sequence-of-returns risk in the early years?
It is the single biggest threat to an early retiree. A market crash in the first few years of withdrawals does far more damage than the same crash a decade in, because you are selling assets while they are depressed and never give them time to recover. Many Canadian FIRE planners hold one to three years of spending in cash or short GICs as a buffer, so they can pause portfolio withdrawals during a downturn rather than locking in losses.