- The answer here is a year, not a balance — the age your savings run out at the spending you set.
- RRSP withdrawals are grossed up: putting $60,000 in your pocket takes roughly $73,000 out of the account.
- Government benefits reshape the plan — the default CPP and OAS entitlements replace $17,470 a year of withdrawals once they start.
- Changing the spending target moves the depletion age more than changing the return assumption does.
How this retirement projection works
Most retirement calculators stop at a balance. This one starts there and spends it. Enter your birth year, the annual spending you want, your province and what you hold in an RRSP and a TFSA, and it steps forward a year at a time to your life expectancy — reporting the age the money runs out, or that it never does.
Each year the portfolio grows at the return you choose, the spending target rises with inflation, and CPP and Old Age Security arrive at the ages you elect. Whatever those benefits do not cover is withdrawn, and the withdrawal is grossed up so that what lands in your account after tax is what you asked to spend.
Nothing is contributed here — this is the drawdown side of the plan, not the saving side. Advanced assumptions let you change your life expectancy, your expected return and your CPP and OAS entitlements, and the balance-by-age table under the chart shows the same projection row by row rather than only as a curve.
The math
The projection runs in nominal dollars on an annual step. Balances grow at the nominal return behind the Low, Medium and High presets — 3.5%, 5% and 6.5% — and the spending target is escalated 2.1% a year, so late rows are future dollars rather than today’s.
Mandatory income settles first: CPP and Old Age Security from the start ages you elect, plus the RRIF minimum withdrawal once you turn 71. The rest of the cash need is met by a gross withdrawal solved by bisection — the engine searches for the gross amount whose after-tax remainder equals what is still needed — drawn in the order cash, non-registered, RRSP/RRIF, then TFSA. Tax is federal plus provincial brackets with the basic personal amount, the age amount and the pension income credit, plus the OAS recovery tax where net income crosses the threshold.
Two limits worth stating plainly. Bracket and credit thresholds are taken from a frozen base-year table indexed forward by the inflation rate you set, not from the current published tables the take-home calculator on this site uses. And one fixed return every year says nothing about sequence risk: a bad first decade is far worse than the same average arriving late.
Worked example
The defaults describe someone in their early sixties in Ontario with $400,000 in an RRSP, $100,000 in a TFSA and $60,000 a year to spend, planning to 92 at a 5% return. To put $60,000 in their pocket in the first year the calculator withdraws about $73,000 from the RRSP — roughly $13,000 of it goes to tax — and closes the year at about $452,000.
The money lasts about nine years. CPP and Old Age Security at 65 add $17,470 a year between them and cut the withdrawal by roughly the same, but half a million dollars spending $60,000 a year does not stretch to 92. That is the useful answer: a year, not a balance. Trimming the target to $54,000 buys two more years; moving the return from 5% to 6.5% buys one.
Key terms
- Withdrawal order
- Which account gets drawn first. This projection uses cash, then non-registered, then RRSP/RRIF, then TFSA — the conventional default, and the one the decumulation planner searches alternatives to.
- RRIF minimum
- An RRSP must become a RRIF by the end of the year you turn 71, after which a set percentage of the January 1 balance has to come out annually whether you need it or not — 5.28% at 71, rising every year after.
- OAS recovery tax
- Old Age Security is clawed back at 15 cents per dollar of net income above an annual threshold, which is why a large RRIF withdrawal can cost more than its marginal rate alone suggests.
- Depletion age
- The age at which the projected portfolio can no longer fund the spending target. Past it, spending is whatever CPP, Old Age Security and any pension provide.