FIRECA
Canadian Retirement Planner
The foundation of FIRE math — and its limitations, adjustments, and how it applies to Canadians with CPP, OAS, and longer retirement horizons.
The 4% rule originated from the Trinity Study, published in 1998 by three professors at Trinity University in Texas. They analyzed historical US market returns and found that a portfolio of 50–75% stocks could sustain a 4% annual withdrawal rate (adjusted for inflation) for a 30-year retirement in almost all historical scenarios.
The rule became the cornerstone of FIRE planning because it gives a simple, memorable formula: your FI Number is 25× your annual expenses.
The original Trinity Study used US market data. Canadian market returns have historically been somewhat lower due to sector concentration (heavy in financials, energy, and materials). However, modern Canadian investors typically hold globally diversified portfolios — not just TSX stocks — which brings returns closer to the global average.
The net effect: the 4% rule likely understates how sustainable Canadian retirements are, because it ignores CPP and OAS as income offsets that reduce how much the portfolio needs to generate.
The Trinity Study modelled 30-year retirements. If you retire at 40 and live to 90, you have a 50-year retirement horizon — nearly double what the study covered. Longer horizons meaningfully change the math.
| Retirement Length | Retire at Age | Safer Withdrawal Rate | FI Multiplier |
|---|---|---|---|
| 30 years | 65 | 4.0% | 25× |
| 35 years | 60 | 3.7% | 27× |
| 40 years | 55 | 3.5% | 28.6× |
| 45 years | 50 | 3.25% | 30.8× |
| 50 years | 45 | 3.0% | 33.3× |
Here's where Canadian FIRE planning gets interesting. Even if you use a conservative 3% withdrawal rate for a long retirement, CPP and OAS dramatically reduce the portfolio size you actually need.
Run thousands of randomized market scenarios to understand your real probability of success — not just historical averages.
Withdraw less in bad years, more in good years. This dramatically improves portfolio survival vs fixed withdrawals.
Set upper and lower spending limits. If portfolio falls below a threshold, reduce spending. If it's up substantially, spend more.
Short-term cash, medium-term bonds, long-term growth assets. Reduces sequence risk by not selling equities in down years.
FireCA runs 1,000+ Monte Carlo simulations on your plan, tests against 8 historical crash sequences, and models CPP/OAS offsets — all built in and free.