Canadian Experts Question FIRE Feasibility for Millennials

Financial experts in Canada are questioning the feasibility of the Financial Independence, Retire Early (FIRE) movement for millennials facing high rents and stagnant wages in major cities such as Toronto and Vancouver.

The FIRE strategy encourages adherents to save and invest 50 to 70 percent of their income, using the "4 percent rule" to calculate nest eggs. Individuals determine their target annual retirement spending, multiply it by 25, and aim to build that portfolio for sustainable withdrawals. For someone needing $45,000 yearly, the goal is $1.125 million.

In practice, basic living expenses complicate the math. Saijal Patel, founder of financial consultancy Saij Elle, estimates monthly costs including $2,000 rent, groceries, transportation, utilities, and minimal discretionary spending at $3,200 to $3,500, or $40,000 to $42,000 annually after tax. "To save 50 percent, you need to match that in savings, meaning an income of about $80,000 to $84,000 after tax, which translates to roughly $110,000 to $120,000 in pretax income in Canada," Patel said. "You'd have to live very frugally, which is hard to sustainably do. FIRE is often framed as a discipline problem, but it's...