Retirement Calculator
Calculator Assumptions
Timing of Contributions: All annual contributions are treated as being made at the end of each year. This means they do not earn any investment return in the year they are contributed.
Rate of Return: The rate of return is assumed to be a constant, nominal annual rate that is applied uniformly across all investments (both taxable and tax-free). It does not account for market volatility, and it is implicitly assumed to be net of any investment management fees (e.g., MERs).
Contribution Allocation: The total "Annual Investment Contribution" is split exactly 50/50 between the "Taxable" and "TFSA" investment account up to the current $7,000 TFSA annual limit.
Rental and Other Income: This income is assumed to be "consumption income" and does not get reinvested.
Tax Model: The calculator uses a simplified tax model. It calculates the income generated from taxable accounts but does not apply a specific marginal tax rate. The "Taxable Income" figure represents pre-tax income. It doesn't differentiate between capital gains, dividends, or interest income.
Inflation: The model does not account for inflation. All figures, including the "Desired Annual Passive Income," are in nominal dollars. The purchasing power of the future income will be less than the equivalent amount today.
Static Income Sources: The "Annual Rental Income" and "Other Annual Passive Income" are assumed to remain constant throughout the entire projection period.
Projection Period: The projection will run for a maximum of 50 years. If the goal is not met within that timeframe, the projection stops. If the goal is met sooner, the projection stops in the year the goal is achieved.
No Withdrawal Modeling: The calculator projects the accumulation phase and stops once the income goal is met. It does not model the decumulation (withdrawal) phase or how drawing down capital would impact the portfolio.