Shares to retirement
How many shares of a stock or ETF would you need to retire on your terms, and how long would the money actually last? Enter your investment, your timeline, your desired income, and the age you want the money to last to.
See also the retirement income and drawdown calculator, the dividend income calculator, the portfolio sensitivity calculator, the investment fee drag calculator, the all-in cost calculator, and the full broker comparison.
1.Estimates only. This calculator provides rough projections based on the assumptions you enter. Actual investment returns vary, and past performance does not predict future results. This is not financial advice.
2.How the drawdown works. Withdrawals are taken at the start of each retirement year and the remaining balance grows for the rest of that year. The retirement phase is modelled in constant purchasing power measured at your retirement date, so your spending holds its real value every year and the portfolio compounds at the real return rather than the nominal return.
3.Returns are assumed to be smooth. Every year earns the same return. Real markets do not work that way, and a run of poor returns in the first few years of retirement does far more damage than the same returns later. This is called sequence-of-returns risk, and a deterministic model like this one understates it.
4.Dividends. Dividends are assumed to be reinvested at the prevailing share price during accumulation and to grow at the same rate as the share price. In practice, dividend growth rates differ from price appreciation.
5.Taxes. Retirement income, withdrawal rate, and portfolio figures are shown before tax. Your actual after-tax income depends on the account type and your marginal rate. For a version that models federal and provincial tax, the OAS recovery tax, and RRIF minimum withdrawals, use the retirement income and drawdown calculator.
6.Pension income. CPP, OAS, and pension amounts are entered in today's dollars and indexed forward at your inflation rate, which matches how CPP and OAS are adjusted. They are assumed to begin at the pension start age you enter. If your pension exceeds your spending in any year, the surplus is not added back to the portfolio.
7.Safe withdrawal rate. The 4 percent rule originates from work by William Bengen and the Trinity Study, and assumes a 30-year retirement with a balanced portfolio. It is a historical rule of thumb, not a guarantee, and it does not adjust for a longer or shorter horizon on its own.
8.Inflation. Accumulation figures are shown in nominal dollars. Retirement figures are shown in retirement-date purchasing power. Both charts join at the same value on the retirement date.
What life expectancy should I plan for?
Planning to a life expectancy average is a common mistake, because roughly half of people outlive it. A safer approach is to plan to an age you have a low chance of exceeding. Many Canadian planners use 90 to 95 for a single person and higher for a couple, since the money needs to last until the second death rather than the first.
What happens if I retire before CPP and OAS start?
Your portfolio has to cover your entire spending during the bridge years, not just the shortfall. That front-loads the withdrawals into the earliest and most dangerous part of retirement. The drawdown chart shades the bridge period so you can see how much of the balance it consumes.
Why does the fixed withdrawal rate option sometimes leave a huge surplus?
Because a fixed percentage of the starting balance is a rule of thumb built for a 30-year horizon and a bad-case return sequence. If you assume a smooth return above your withdrawal rate, the balance compounds faster than you spend it and grows indefinitely. That surplus is a sign the assumptions are optimistic, not a forecast of wealth.
Why does the deplete-to-zero option ask for a smaller portfolio?
Because it spends the principal rather than living off the growth. That is a legitimate plan, but it leaves nothing for a longer life, a market crash, long-term care costs, or an estate. Check the implied initial withdrawal rate the tool reports: if it is well above 4 percent, the plan depends on returns arriving smoothly.
Does this calculator account for taxes?
No. All figures are before tax. Your after-tax retirement income depends on the account type, since TFSA withdrawals are tax free while RRSP and RRIF withdrawals are taxed as income, and on your marginal rate in retirement.
Is it risky to hold only one stock or ETF for retirement?
Yes. Concentrating a retirement portfolio in a single security exposes you to company-specific or sector-specific risk. A broadly diversified all-in-one ETF reduces this risk substantially. This calculator is a planning exercise, not a recommendation to concentrate holdings.