If you assume a couple wants about $60,000 to $70,000 per year after taxes, and CPP plus OAS covers about $30,000 to $40,000 depending on work history and timing, then the portfolio should yield $25,000 to $35,000. Using a conservative withdrawal guideline of 4%, which indicates approximately $625,000 to $875,000 in investable assets. To allow for bad markets, health costs or longer life, a Tax Free Savings Account (TFSA) balance of about $500,000 to $800,000 per person seems in the range that many Canadians “would probably need.” Although more may be needed if you’re retiring early or renting forever.
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XEQT
That’s true iShares Core Equity ETF Portfolio (TSX:XEQT) enters. It’s an all-in-one exchange-traded fund (ETF) that holds other ETFs, giving you broad global stock exposure in one ticker. It keeps you fully invested in stocks so it can fluctuate, but also gives your TFSA a long runway to recover. It spreads money across Canada, the United States and international markets so that one country’s dire situation doesn’t have to derail the plan. The simple pitch: own part of thousands of companies and let time do the hard work.
Over the past year, XEQT’s story has largely followed the mood swings in the market, rather than the fund-specific drama. Investors turned from interest rate fears to more measured outlooks, and global stocks reacted wildly. A global equity fund like XEQT usually does better if growth continues and confidence returns. It can fluctuate if bond yields rise, if the Canadian dollar fluctuates, or if geopolitics affects risk appetite. The goal of packaging is not perfection, but consistency. One diversified holding that you can continue to buy through noise.
Future in focus
At the time of writing, the yield is around 1.6%, with the exact amount changing as markets and dividends change. The management expense ratio is around 0.20%, which is important because low costs contribute to its increase over decades. For long-term planning, the largest number is expected stock returns. Many investors use an inflation rate of 6% to 8% per year and then accept that each year could be well above or below that. It also rebalances the balance for you so you don’t end up in a lopsided mix after big market moves. The trade-off is that you accept its global weight, and you live with currency movements because not everything is hedged to Canadian dollars. And you automatically keep the contributions.
The prospects for XEQT remain simple, and that’s the appeal. When inflation cools and interest rates fall, stocks often get some breathing room, but a world of higher interest rates can still function if companies keep growing. You can expect volatility because 100% equity exposure comes with real declines, and retirement timing risk matters. Valuation also plays a role, as markets sometimes price in a lot of good news, which can dampen future returns for a while. XEQT is the best fit as a core TFSA holding while you still have years to invest, and fits well with more stable assets as you approach retirement.
In short
A TFSA target doesn’t have to be perfect to be powerful. You just need a number that will help you save, invest and protect the plan from lifestyle creep. If you can build up to $500,000 to $800,000 per person within a TFSA, and use a broad, low-cost growth engine like XEQT for the long term, you give yourself a real shot at a retirement that feels free instead of vulnerable. Opportunity is not a trick, but patient preparation and perseverance.
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