Financial Independence Navigator
Take Control of Your Financial Future: FNA & FIN Calculator
Did you know? Financial security isn’t just about income; it’s about what you keep. This tool helps you calculate two critical numbers based on the How Money Works principles:
- FNA (Financial Needs Analysis): The protection you need today to cover debts and replace income.
- FIN (Financial Independence Number): The asset amount you need to accumulate to retire with dignity.
1. Your Protection Need (FNA)
Based on the “Theory of Decreasing Responsibility”: When you are young with high debt and dependents, your need for insurance is highest.
Use “Debt Stacking” to eliminate these!
Until kids are independent or mortgage paid off
2. Your Independence Number (FIN)
“Retirement is an amount of money, not an age.” Calculate what you need to stop working.
Historical average is roughly 3%
Safe withdrawal rate (typically 4%)
CPP + OAS estimate (e.g., $1,500)
Your Financial Snapshot
To protect your family today, your estimated Insurance Gap is:
$0
Solution: Buy Term & Invest the Difference.
Don’t mix insurance with savings. Use low-cost Term Life Insurance to cover this gap. It’s affordable protection for the years you need it most.
Don’t mix insurance with savings. Use low-cost Term Life Insurance to cover this gap. It’s affordable protection for the years you need it most.
To retire and maintain your lifestyle, your Financial Independence Number (FIN) is:
$0
Strategy: The Rule of 72 & Tax Deferral
How do you reach this number?
How do you reach this number?
- Pay Yourself First: Aim to save at least 10% of your income.
- Compound Interest: If you invest at 9%, your money doubles every 8 years (72 ÷ 9 = 8).
- Minimize Tax: Utilize RRSPs (tax-deferred) and TFSAs (tax-free) to keep more of what you earn.