Time to Freedom
Time to Freedom is the projected number of years until your dividend income reaches a target lifestyle income — the point at which your portfolio generates enough monthly cash to cover your chosen spending level without selling assets. It reframes dividend investing from a wealth accumulation question (“how much do I have?”) into an income milestone (“when do I get there?”). The output is a specific year, not a portfolio balance.
How Prospyr uses it
The Time to Freedom Calculator is built around this concept. You enter your current holdings, monthly contribution, expected dividend growth rate, and target monthly income. The calculator outputs your Time to Freedom date — a specific year — along with the income trajectory that gets you there. The Reverse Income Planner works backwards: enter your target date, and it tells you the portfolio size, yield, or contribution rate needed to hit it on time. Every calculation uses after-tax dividend income for Canadian account types — TFSA, RRSP, and non-registered — so the output reflects what you actually keep, not the gross yield printed on the holding.
Why this matters for Canadian investors
For Canadian investors, Time to Freedom often arrives sooner than US-based projections suggest. Eligible dividends from Canadian corporations receive preferential tax treatment through the federal dividend tax credit, which means $50,000 in eligible dividend income is taxed significantly less than $50,000 in employment income in most provinces. Prospyr’s calculator models net income after federal and Ontario tax — not gross yield — which is the number that actually determines when you reach financial freedom.