How Much Do I Need to Save to Retire by 50?


How much do you need to save to retire by age 50?

Could early retirement by age 50 occur using the appreciated value of your home?

Is that an option for you?

It’s absolutely an option for some given how hot real estate has been in Canada.

Read on to learn more and why using the appreciated value of your home could work wonders for your early retirement plan.

Financial independence facts to remember

Like we shared in our last case study, financial independence (FI) is a simple concept but it’s not easy to achieve.

Realizing financial independence takes a plan, some multi-year discipline, and ideally one or both of the following:

  1. For every additional dollar you save, you can invest that money so it can grow your wealth faster, and/or,
  2. You can realize financial independence by consuming less.

Here at Cashflows & Portfolios, we suggest you optimize both options above.

Check out how Michelle, a 20-something software engineer, plans to retire by age 40 including how much she’ll need to save to accomplish that goal.

She has a great shot at realizing her financial dreams through building a low-cost, tax-efficient portfolio using ETFs here. 

The math for early retirement is actually quite simple

Members of our site have already learned the powerful math behind early retirement: the more you save, the faster you’ll achieve your goal. Sure, your portfolio rate of return is important but it only matters once you have a modest amount of money invested anyhow.

For the vast majority of us, including our own experiences as we approach full-on financial independence, it’s our savings rate that delivers the biggest wealth-building power.

Family comes first

Yet not every person has a high savings rate. In fact, most don’t.

Maybe you’re no longer in your 20s. Maybe you have a young family but you still aspire to enjoy an earlier retirement than most.

If so, this post is for you – including how you can take advantage of any hot housing market where you live and use that real estate value to retire early.

Let’s look at an example.

How much do you need to save to retire at 50?

In our profile today, our couple is Will and Zoe who are aged 35. They are married with two young children. They were born and raised in Kelowna, BC and they continue to love it there. It’s not hard to see why. The wineries, the foothills for hiking, the lake for activities in the summer, and ski hills nearby for winter fun.

Will and Zoe got married at age 28, and that happened to be a big year for them since they also bought and moved into their first home.

Just like nobody saw the pandemic coming, Will and Zoe never saw the hot housing market come either – although they’d always hope their house would appreciate in value over time. Just not this much.

Kelowna housing prices have been hot of late. See the chart below for some evidence with thanks to Mortgage Sandbox.

Kelowna - Retire by 50


As house prices continue to climb across many parts of Canada, including Kelowna, it has Will and Zoe thinking – can we retire by age 50 including leveraging the value of our home for early retirement?

Let’s find out.

Learn where your money goes – the profile and cashflow

Zoe loves math and followed that passion into accounting. Will has and continues to be a part-time personal trainer.

As a senior accountant in a small firm, Zoe makes $120,000 per year. Will makes $40,000 as a personal trainer albeit on the side because he is mostly a stay-at-home dad.

With two young kids, there are definitely expenses to be had but that doesn’t mean Will and Zoe don’t dream of early retirement. With diligent savings, Zoe knows maxing out their Tax-Free Savings Accounts (TFSAs) and paying off that growing asset that is their house will be their early retirement keys.

Zoe (and Will) know they can likely save upwards of 25% of their net income because they’ve already downloaded the FREE cashflow spreadsheet from Cashflows & Portfolios with their free subscription! (thanks Zoe!)

Here are the other cashflow and investing assumptions:

  • We’ve assumed our couple takes home $119,000 annually after tax.
  • We’ve assumed they will take their Canada Pension Plan (CPP) benefits at 70 – since deferring CPP maximizes their income from this benefit.
  • With a house valued at over $1 million now (far higher than when they bought their house seven years ago), we have also assumed they will downsize this house after the kids leave in another 15 years – and buy a less expensive condo as part of their downsizing plan.
  • Rates of return will be about 6.5% (before inflation) inside the TFSA and RRSP, investing mostly in equities.
  • Inflation will be set at 2% for their salaries.
  • They will take their Canada Pension Plan (CPP) at age 70.
  • They will take their Old Age Security (OAS) benefit at age 65.

What does the early retirement math say?

With a solid after-tax income stream coupled with a strong, sustained savings rate, Will and Zoe should be able to realize their early retirement dreams with no problems at all.

This is how that happens…

Thanks to Zoe’s savvy investing knowledge, she already knows the benefits of maxing out her TFSA (and Will’s) as much as possible, as soon as possible every year. By maxing out her TFSA every single year since account inception, now at age 35, her TFSA is worth over $100,000. While Will’s TFSA is not yet maxed out, it remains a modest $50,000.

Making contributions to their TFSAs will be a key investing pillar to their early retirement dreams. (Hint: it should be part of yours!)

Our couple’s path to financial independence will also be aided by Zoe’s Group RRSP at work. Will has barely any RRSP assets at age 35 and he won’t have significant contributions for the coming decades, but they will occur where money is available as he charges more for personal training services.

Maxing out contributions to their TFSAs and RRSPs is not required for early retirement. They have kids and those kids have expenses. Will and Zoe have something else to rely on.

Beyond the biggest asset they own that is their human capital, and their health, in the coming 15 years they are banking on a modest, luke-warm real estate market in Kelowna. With a purchase price of around $550,000, their city home near the lake 7 years later has ballooned to a present value worth $1.2 million. And growing. 

In our assumptions, we’ve assumed the house will continue to grow ahead of inflation (4% vs. 2%) but we definitely don’t expect double-digit real estate returns to occur year-over-year. We need to be realistic here!

As of right now, this year, they are in outstanding shape as they raise a young family.

And their net worth will only continue to grow (at least until retirement).

Retire by 50 - Net Worth

As Will and Zoe continue to pay down debt, as contributions are made largely to their TFSAs over the coming years, along with Zoe’s Group RRSP, their net worth will be bolstered by a hot real estate market earning 4% annualized.

Non-registered assets will climb modestly thanks to an emergency fund established.

While 4% housing returns are indeed higher than inflation, we think it just might happen with today’s prolonged lower interest rates until age 50.

The sum of these factors delivers a retirement maximum spend that is off the charts.

With a net worth of close to $3 million in today’s dollars at age 50, assuming they sell their home in another 15 years that has appreciated 4% year-over-year during that period, we believe Will and Zoe can spend up to a carefree maximum of $112,000 per year (in today’s dollars) and never run of out money until age 100.


Finally, we can see starting at age 50 in the table below, that home sale and downsizing effort to a condo or other lower cost of living area is going to deliver a significant windfall of money in a taxable account they can draw down over time. The only thing better than a tax-free investment (TFSA) is a tax-efficient investment. A home sale that has appreciated tremendously in value north of $2 million dollars in another 15 years can be Will and Zoe’s ticket to early retirement, carefree spending.

Retire at 50 - Sources of Income

For our case study, thanks to appreciated and higher (assumed) real estate prices climbing in their hometown in the coming years, our couple profiled can absolutely retire early without any hesitation.

Of course, the future is always very uncertain. Hot house prices might be here to stay or gone tomorrow. Maybe 4% going forward over the rate of inflation is asking too much. More so, maybe our couple profiled might have another child and need to upgrade their home. Will may change careers or go back to full-time work, and Zoe could always move up the corporate ladder if she chooses to accelerate their plan. The future is always cloudy but it can be exciting as well. This is why financial projections can be important at any age to understand where you are and to help forecast where you might be!

We can however confidently say that with a solid Group RRSP at work, banking some 25% of their net income in the coming 15 years without fail, even with minor house price appreciations aligned to inflation over the coming years in Kelowna, our 30-something couple Will and Zoe will be well-positioned to meet any early retirement dreams far better than most.

Final thoughts on how much to save to retire by 50

Extreme early retirement is not for everyone, especially those working on raising a young family.

But early retirement is still well within reach for many 30-somethings if they mind their cashflows and portfolios like this couple has done, and keep a modest and sustained savings rate. Younger couples living in a higher cost of living location can also consider downsizing to capitalize on their home value. It’s not for everyone but it is an option.

In future posts, we’ll do something different. We’ll share how you can retire by age 60 on a modest income. That case study will assume you started saving much later in life but you can still realize some retirement dreams all the same if you save enough in the last 15 years before retirement.

Stay tuned for that case study!

To help you plan for your retirement and help solve the retirement decumulation puzzle, let us know if there are any specific scenarios that you would like to see.  As well, make sure you subscribe to our site so you never miss a post!

If you are interested in obtaining private projections for your financial scenario, please contact us here to get started.

Disclaimer: Any information shared on our site (“Cashflows & Portfolios” or related to our site, is for awareness and illustrative purposes only. 

We thank you for reading and sharing!

Further reading:

You can carry a mortgage into retirement – if you have a great plan. Read on in this early retirement case study.

When to take Canada Pension Plan (CPP) in retirement – find out what works in this case study here. 

To help you invest, check out these very comprehensive posts:

Everything You Need to Know about TFSAs.

Everything You Need to Know about RRSPs.

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Disclosure: Cashflows & Portfolios is reader-supported. When you buy through links on our site, we may earn an affiliate commission.

4 thoughts on “How Much Do I Need to Save to Retire by 50?”

  1. Our house has gone up significantly in the last 7 years but as I have always done, will never count it in my net worth or asset calculations. Housing is far too risky from my personal perspective to rely on as a safety balloon. Far too many times in Canada have communities (outside of Toronto/Vancouver) been subject to massive swings due to economic factors. We are also seeing some significant affects due to shifting industry in Canada seeing some regions collapse economically as well as climate change creating risk (flooding/wildfires).

    Stick to cutting expenses, saving more and building a solid plan without using a home is my take on this. Sounds like they are on an awesome path and can do well without factoring it in.

    Great article regardless, thanks for sharing.

    • Nice to hear from you Chris. Congrats on the house increase in value! I would like to think, maybe like you because you have to live somewhere that real estate is really a safety net.

      I don’t think there have been many huge price swings beyond TO and Vancouver – I would think that’s where most of the major price swings have occurred.
      Anyone in those cities that had bought 10 or 20 years ago, owns a lottery ticket.


      Yes, this couple profiled is well on their way to wealth for sure.


  2. Curious as to why these articles are showing up in my emails from Cashflows & Portfolios as the featured article of the week, when they are actually well over a year old. How do I get current content to show in your emails?

    • Hi Glen,

      Thanks for your email. We tend to publish new content, every 2 weeks, and newsletters are weekly to recap previous case studies for readers.

      Plesae stay tuned for new content – this week 🙂

      Thanks for your readership.


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