FI Plan is a Canadian retirement planning tool. This page explains exactly how the model works, what it assumes, what it simplifies, and what it doesn't do yet. We believe in full transparency. You deserve to know what's under the hood.
HOW THE FI PLAN MODEL WORKS
Transparency about assumptions, simplifications, and limitations
ON THIS PAGE
THE BIG PICTURE
FI Plan projects your financial future by stepping through your life month by month, from now until the end of your plan. You tell it your accounts, income, expenses, retirement age, and a few key assumptions (like expected investment returns and inflation), and it calculates what happens to your money over time.
This is a scenario tool, not a crystal ball. It answers the question: "If these assumptions hold, what does my financial path look like?" You should run multiple scenarios with different assumptions to build confidence in your plan.
WHAT FI PLAN DOES
- Accounts: Models multiple account types including chequing, savings, non-registered, TFSA, RRSP, RRIF, LIRA, and LIF, each with their own balances, fees, and expected returns.
- Life phases: Covers both the saving years (accumulation) and the spending years (retirement/decumulation), with an optional solver that calculates how much you need to save each month to make your plan work.
- Canadian taxes: Approximates your personal income tax using federal and provincial brackets, dividend and capital gains treatment, CPP/EI/QPIP contributions where applicable, and OAS clawback logic. This is not a full tax return. It's a planning-grade estimate.
- Government benefits: Models CPP and OAS income streams based on your chosen start ages and configuration. OAS clawback (recovery tax) is calculated in the monthly loop based on your prior-year income.
- Registered account rules: Enforces RRIF and LIF minimum withdrawals using prescribed factor tables. Handles automatic conversions (RRSP to RRIF, LIRA to LIF) at the appropriate ages.
- Contribution room: Tracks TFSA and RRSP room. TFSA annual room follows published policy tables. RRSP new room is estimated using a simplified 18%-of-prior-year-earned-income formula, capped at the modeled dollar limit. Your starting room is based on what you enter. FI Plan does not connect to the CRA to look it up.
- Expenses: Supports recurring retirement expenses and one-time lump-sum expenses.
- Detailed output: Every result can be traced back through a detailed ledger, so you can see exactly why the model produced the numbers it did.
ASSUMPTIONS & SIMPLIFICATIONS
Every financial model makes simplifications. Here's an honest accounting of ours, along with why we think they're reasonable.
Time & timing
Monthly steps. Everything happens on monthly boundaries. Real life doesn't work this way (your paycheque might land on the 15th, your mortgage on the 1st), but monthly granularity keeps the model transparent and fast. For long-term planning, this has no meaningful impact on your results.
One inflation rate. You set a single inflation rate and it applies broadly across your plan (expenses, income growth, OAS thresholds, contribution room projections, etc.). In reality, different costs inflate at different rates. Groceries, housing, and healthcare all move differently. A single rate is a reasonable simplification for planning purposes, and you can always run scenarios with higher or lower rates to see the impact.
Taxes
Tax rules are frozen at the most recent year available. FI Plan uses an approximation of Canadian tax rules based on the most recent tax year coded into the engine (currently 2025). As new tax years are published, the engine will be updated, but it always applies one fixed set of rules across your entire plan. It does not predict future tax law changes, because nobody can. This means future taxes could be higher or lower than what the model shows. Running a scenario with slightly higher tax rates is a smart stress test.
Taxes settle once per year, in April. Rather than simulating pay-as-you-go withholding throughout the year, the model assesses and settles your prior-year tax in April. This is a simplification. In real life, your employer withholds taxes from every paycheque, spreading the cash flow impact more evenly. The model's approach can sometimes make mid-year cash balances look slightly different than reality, but it doesn't change your total tax bill.
All dividends are treated as eligible dividends. As a simplification, FI Plan assumes that all dividend income is eligible dividend income. In reality, some dividends (particularly from smaller Canadian corporations) are classified as "other than eligible" and receive different tax treatment. This simplification may slightly understate the tax on dividend income in some cases. The tax engine also handles capital gains and common credits, but does not attempt every provincial credit nuance or aggressive tax-arbitrage strategy. It's a solid planning estimate, not a line-by-line T1 replacement.
Contributions & saving
A single, constant monthly savings amount. During accumulation, the model uses one fixed monthly savings amount for the entire pre-retirement period (or solves for one). You cannot tell it to gradually increase your savings over time, pause contributions during a career break, or account for bonuses and raises. It's the same dollar amount every month from now until retirement. This keeps the model simple, but it means your plan won't reflect the natural ups and downs of real-life saving.
RRSP room is estimated, not exact. RRSP contribution room is projected using a simplified formula. It doesn't account for pension adjustments from defined benefit plans, and carry-forward amounts may drift from your actual CRA Notice of Assessment over time. For future years, the RRSP dollar limit is projected using your plan's inflation rate. The government may set it differently.
Starting contribution room is what you enter. FI Plan doesn't reconstruct your history from CRA records. If your entered room is off, your projections will be too. We recommend checking your CRA My Account for accurate numbers.
Investment returns & fees
Returns are fixed, not random. For each account type, you specify an expected return rate for each of three asset classes: cash, equities, and fixed income. The model applies these rates consistently every month. You also have the option to "switch" to a different set of return rates at one point in your plan (by default, your retirement age). For example, you might use this to reflect a shift toward more conservative investments in retirement. This switch can only happen once. Markets don't work this way. Returns bounce around year to year, and the sequence of good and bad years matters a lot, especially early in retirement. A fixed-return projection will not show you the range of outcomes you might actually experience. This is one of the most important limitations to understand. We recommend running scenarios with lower returns to stress-test your plan.
Fees are user-specified. You can set account-level fees (flat and percentage-based) for each account type. If you don't specify fees during setup, the model will use default assumptions. The timing of when fees are deducted within the first plan year is optional to configure, so the exact timing may not perfectly match your real fee schedule, but the total annual drag on your wealth will be captured.
Registered account decumulation
LIF maximums are not enforced. FI Plan applies LIF minimum withdrawals correctly, but does not enforce provincial LIF maximum withdrawal limits. This means the model might allow you to withdraw more from a LIF than you legally can, which could overstate your available spending. If you have significant LIF assets, keep this limitation in mind. Your actual spendable cash may be lower than what FI Plan shows. Why don't we enforce LIF maximums? Because the rules governing LIF maximums are set by each province, vary significantly across jurisdictions, and change over time. Modeling them accurately would require collecting additional detailed information from you, information that most people don't have readily available. Rather than model it poorly and give you false confidence, we've chosen to leave it out and be upfront about the limitation.
RRIF minimums are enforced. Mandatory RRIF minimum withdrawals follow prescribed CRA factor tables.
CPP & OAS
Configured, not calculated from contribution history. CPP and OAS are modeled based on the amounts, start ages, and settings you provide. FI Plan does not connect to Service Canada or reconstruct your CPP contribution history to estimate your actual benefit. For the most accurate inputs, use the Canadian Retirement Income Calculator on the Service Canada website.
OAS clawback is modeled. The OAS recovery tax is calculated based on your prior-year income, capturing this important tax effect for higher-income retirees. The calculation uses a reasonable proxy for your net income, though it may differ slightly from the exact CRA line-by-line calculation.
Household
Single person only, no spouse or partner modeling. FI Plan does not support modeling a household with two people. There is no way to add a spouse or partner, which means no joint account optimization, no pension income splitting, no survivor benefits, and no combined CPP/OAS household planning. This is a known limitation. If you're part of a couple, the model cannot capture the financial interactions between you and your partner.
Other
No estate planning. The plan runs to your chosen end age and stops. Residual wealth is not optimized for inheritance tax, probate fees, or charitable giving.
External contributions are post-tax. Money you add from outside the model (gifts, inheritance, etc.) is treated as already-taxed cash. It won't be taxed again.
WHAT FI PLAN DOES NOT DO (YET)
We're building FI Plan iteratively. Here's what's not in the model today. Some of these are on our roadmap, others may be added based on user feedback.
Household & family
- Spouse/partner modeling. No second person, no joint accounts, no income splitting, no survivor benefits.
- Children and dependents. No RESP, no Canada Child Benefit, no childcare or education costs.
Government benefits & programs
- GIS (Guaranteed Income Supplement). No eligibility calculation, clawback modeling, or interaction with other income.
- Disability benefits. No CPP Disability, provincial disability programs, or long-term disability insurance.
- Provincial supplements. No modeling of province-specific income supplements for seniors.
Advanced retirement income
- Reverse mortgage. No home equity release products.
- Purchased annuities. No modeling of life annuities, deferred annuities, or guaranteed lifetime withdrawal benefits.
- Defined benefit pension details. No bridge benefits, commuted value analysis, or pension adjustment calculations.
Simulation & stress testing
- Monte Carlo simulation. No probability-of-success analysis using random return sequences.
- Historical back-testing. No worst-case analysis using actual historical return and inflation data.
- Variable inflation. No modeling of different inflation rates for different expense categories (e.g., healthcare vs. general CPI).
Accumulation flexibility
- Variable contributions. No built-in schedule for changing savings rates over time (raises, parental leave, career breaks, irregular bonuses).
- Debt modeling. No mortgages, HELOCs, credit lines, or debt payoff strategies.
Tax & optimization
- Live tax rate updates. Tax rules are coded at a point in time; they don't auto-update when governments announce changes.
- Automatic CPP/OAS timing optimization. You choose your start ages; the model doesn't search for the optimal timing.
- Drawdown sequencing optimization. No automated strategy for the most tax-efficient order to withdraw from accounts.
- TFSA/RRSP contribution optimization. No automated guidance on how to split contributions between account types.
- Corporate / holding company planning. No CCPC, RDTOH, GRIP, or salary-vs-dividend modeling.
Real estate & insurance
- Real estate tax treatment. You can use one-time income or expense events to represent the sale or purchase of real estate, but the specific tax implications of real estate transactions (capital gains on non-primary residences, capital cost allowance, etc.) are not modeled. One-time income events are treated as post-tax cash.
- Insurance. No life, critical illness, or long-term care insurance modeling.
Integrations & data
- Bank and investment account connections. All data is manually entered; no automatic imports.
- CRA data integration. No connection to CRA My Account for contribution room or benefit amounts.
Other
- Cross-border / U.S. tax. No FATCA, U.S. tax treaty, or cross-border planning.
- Quebec-specific rules. QPP and Revenu Québec details may be only partially approximated.
- Estate and trust planning. No beneficiaries, trusts, graduated rate estates, or charitable giving strategies.
HOW FI PLAN COMPARES TO OTHER TOOLS
There are several excellent Canadian retirement planning tools on the market, each with their own strengths. Some offer automated tax optimization, Monte Carlo simulation, couple modeling, GIS calculations, or advisor workflow tools that FI Plan does not currently provide.
FI Plan's focus is on being transparent, traceable, and Canadian. Every number in your plan can be traced back to a specific calculation in a detailed ledger. We think that understanding why the model says what it says is just as important as the number itself.
We encourage you to explore other tools and choose what works best for your situation. Retirement planning is too important to rely on any single tool.
HOW TO GET THE MOST OUT OF FI PLAN
- Run multiple scenarios. Change your assumed returns, inflation, retirement age, and spending. See how sensitive your plan is to different assumptions.
- Use conservative return assumptions. If your portfolio has historically returned 7%, try running your plan at 5% or even 4%. A plan that works under conservative assumptions is a plan you can trust.
- Verify your inputs. Check your TFSA and RRSP contribution room on CRA My Account. Get your CPP estimate from Service Canada. Accurate inputs produce accurate projections.
- Revisit regularly. Your life changes. Your plan should too. Update your inputs annually or after major life events.
- Don't rely on any single tool. FI Plan is a planning aid, not a financial advisor. Consider consulting a qualified professional, especially for complex situations.
DISCLAIMER
FI Plan projections are hypothetical scenarios, not predictions. Tax calculations are approximations and should not be used as a substitute for professional tax advice. Assumed investment returns are not guarantees of future performance. FI Plan is not a substitute for personalized advice from a qualified financial planner, tax professional, or legal advisor. Users should verify contribution room, benefit eligibility, and account rules (especially LIF maximums and GIS eligibility) against the CRA, Service Canada, and relevant provincial authorities.
Questions? Contact us at hello.fiplan@gmail.com.