Portfolio Builder

Expected return (FP Canada 2026 assumptions)

Each asset class is assigned a long-run nominal return from the FP Canada 2026 Projection Assumption Guidelines (before fees): Canadian equity 6.3%, US equity 6.4%, international equity 6.6%, fixed income 3.2%, cash 2.4%. Your portfolio's gross return is the weighted average, and the equity portion is itself blended by your Canada/US/international split:

gross = stocks% × (CAD% × 6.3 + US% × 6.4 + Intl% × 6.6) + bonds% × 3.2 + cash% × 2.4

Your net return subtracts the MER: net = gross − MER. The MER is charged on the whole balance every year, so it comes straight off the return and compounds against you.

Growth projection

We compound monthly, adding your contribution at the end of each month: balance = balance × (1 + m) + monthly, using an effective monthly rate m = (1 + net)^(1/12) − 1. The final balance minus everything you contributed is your total gains. The MER drag is the dollar gap between this path and an identical zero-fee path.

Where your return comes from

Each slice of your mix contributes weight × assumed return percentage points, and the slices add up exactly to the gross return (at the 60/35/5 default with a 30/45/25 equity split: 1.13 + 1.73 + 0.99 + 1.12 + 0.12 = 5.09%). The MER comes straight off to give the net return. The last step converts to a real return with FP Canada's 2.1% inflation assumption using the exact formula real = (1 + net) ÷ (1 + inflation) − 1, which is why the inflation step is slightly larger than the inflation rate itself.

Range of outcomes (Monte Carlo)

Markets do not deliver the expected return smoothly, so we replay your plan through 1,000 simulated markets. Each one compounds monthly, adds your contribution at each month end, and draws its returns from a lognormal distribution whose long-run (compound) rate is your net return and whose yearly volatility σ is that of your mix, where s, b and c are your stock, bond and cash weights:

σ = √(s²·σstocks² + b²·σbonds² + c²·σcash² + 2·s·b·σstocks·σbonds·ρ)

with σ_stocks = 15%, σ_bonds = 5%, σ_cash = 1% and a stock and bond correlation ρ = 0.2, long-run historical approximations (FP Canada publishes returns, not volatility). That gives about 9.5% a year for a 60/35/5 mix. All equity regions share the stock figure, so the range does not model currency swings. Fees are a fixed drag on the return and do not change the volatility.

The darker band holds the middle 50% of outcomes and the lighter band the middle 80%: one market in ten ends below the lighter band and one in ten above it. The median sits within a few percent of the steady path, a little above it over long horizons with regular contributions. We also count the share of markets that end below what you contributed. The markets are drawn from a fixed seed, so the same inputs and a shared link always show the same range. Real markets have fatter tails than this model, so treat the range as a planning guide, not a forecast.

Retirement income at 4%

The income figure applies a 4% safe withdrawal rate to your projected final balance. That balance is in future dollars, so the card also shows what the income would buy today: income ÷ (1 + inflation)^years. The 4% rule of thumb has historically supported roughly 30 years of inflation-adjusted withdrawals, but it ignores taxes, CPP/OAS, and sequence-of-returns risk, see the retirement drawdown and FIRE tools for a fuller picture.

Diversification & rebalancing

Spreading across regions and asset classes reduces the chance that any single market sinks your plan; a home-country tilt to Canada is common, but the TSX is heavily weighted to financials and energy. The holdings table assumes you rebalance back to your target weights, which is what keeps your risk level steady over time.

What this doesn't model

Inflation on the headline and the charts (they are in future dollars; the return build-up and the income card show today's-dollar equivalents), taxes and account type (TFSA vs RRSP vs non-registered), dividend versus capital-gains treatment, currency risk on foreign holdings, or market crashes worse than the lognormal model allows. For fee-only detail try the compound growth & fee drag tool.