About the retirement plan
LAST UPDATED: SEPTEMBER 2026The retirement figure in Finights is a tool to help you think. It is not financial, tax or legal advice. This page says what the arithmetic does, what it assumes, what it leaves out, and where every figure in it comes from — including the parts that only apply to some people, so you can find your own case rather than read a general answer.
What it is
Arithmetic over what you have, what goes in, and what you told us you want. It grows your savings at an assumed rate to the year you stop working, then draws your spending down until either the money or the plan ends.
Everything is in today’s dollars, with growth taken after inflation, so the figures mean what they say now rather than what they would say in forty years.
What it assumes about markets
A steady rate of return, every year, for decades, in the headline figure. Real markets do not do this, which is why the plan also runs ten thousand futures with the same average and different luck, and tells you how many of them last.
Those futures are drawn from a bell curve around the return set in your own planning settings. Real crashes are deeper and more clustered than a bell curve allows, so treat a high success rate as encouragement rather than a promise.
What it assumes about you
The shape of your spending: flat unless you have told us otherwise. In life it usually starts higher, dips through the late seventies, and rises again for care.
That nothing unexpected happens — no illness, no redundancy, no inheritance, no new roof you have not told us about.
That the figure you gave us for what a year costs means what we think it means. If you told us it is what you spend now, we take the loans and mortgage inside it off as each one closes. If you told us it is a budget for retirement, we use it exactly as typed. You can change which of those it is in the app.
That you are one person — or, if you have told us about a spouse or common-law partner, a household of two. With a partner, your spending figure is what the two of you spend together; their CPP, OAS and savings come from what you entered about them, on their own ages; each of you is taxed on your own return; and the Guaranteed Income Supplement is tested on your combined income at the couple rates.
With a partner, we also assume one of you dies first, at 85 unless you change it, and check whether the other’s money still lasts: their spending falls to about 70% of what you spent together, the one who died stops receiving OAS, and the survivor receives a share of their CPP. We run it both ways round and show the harder one.
The government money it counts
CPP, or QPP if you are taxed in Quebec. Either at the figure you gave us from your own statement, or at an average we chose and label as ours. Taking it before 65 reduces it permanently and taking it later increases it: CPP stops growing at 70, Quebec’s at 72. Taking it early reduces it by 0.6% a month under either plan.
Old Age Security. Reduced for years you have not lived in Canada after your eighteenth birthday: forty years earns the whole pension and fewer earns that fraction. It rises by 10% at 75, and it is clawed back at 15 cents in the dollar once your income passes the threshold.
The Guaranteed Income Supplement. A monthly, tax-free top-up for someone on OAS with little other income — at the bottom of the range it is worth more than CPP. Every dollar drawn from an RRSP or RRIF reduces it; OAS does not, and neither does anything taken from a TFSA. We straight-line it between the published maximum and the published cutoff, which is exact at both ends and slightly generous in between.
The tax in it
If you have not told us which province you are taxed in, there is no tax in these figures at all. That makes every number larger than what you could actually spend, often by about a quarter. Telling us where you live turns on income tax, RRIF minimums and the OAS clawback together.
Once we know: withdrawals from an RRSP, RRIF, LIRA, LIF, workplace pension or DPSP are taxed as income at your province’s rates. So is an FHSA held for retirement: it is tax-free only if it buys a first home, and otherwise it moves to an RRSP or RRIF and is taxed as it comes out, so the plan counts it as RRSP money. A TFSA comes out whole. An ordinary, non-registered account has half its yearly growth taxed as a capital gain, as though it were realised each year — which charges the tax a little sooner than reality would for anything you simply hold, and that gap is widest for gold and crypto, which pay no income at all along the way.
With a partner, each of you is taxed on your own share: your own pensions, your own part of the registered savings, and your own part of the ordinary account’s growth. Up to half of eligible pension income — a workplace pension at any age, RRIF or annuity income once the one receiving it is 65 — is moved to whichever return makes the two closest, as the Canada Revenue Agency allows couples to elect. CPP, OAS, rent and work income are never split.
The rates are this year’s, applied to figures in today’s dollars. The government indexes both, so the two match. They are approximations: every provincial low-income reduction but Ontario’s is left out, as are surtaxes other than Ontario’s, and the credits that depend on facts we never ask you for. We also use the federal $2,000 pension income amount in place of each province’s own, which differs.
The limits it applies
RRIF minimums. An RRSP must become a RRIF by the end of the year you turn 71, and from the following year a percentage set by the government must come out whether you want it or not. It is taxable income, so it can push you into the OAS clawback without you spending a cent of it.
Contribution room. The plan will not assume you keep contributing more than the government allows. What will not fit is carried into an ordinary account, because that is where the money would actually go — you keep saving it, it just stops being sheltered.
For a TFSA, we use the room you told us and add each January’s new limit. If you have not told us, we assume the most anybody could have — every year’s limit since you turned 18, came to Canada, or 2009, whichever is latest — which never holds back money that would really fit, but stops a large monthly amount growing tax-free for ever. The real figure, from CRA My Account, can only lower it.
For an FHSA: $8,000 of room a year, one year carried forward, $40,000 in a lifetime, and nothing after the year you turn 71. We do not know when you opened it, so we do not apply the fifteen-year limit.
For an RRSP, whose room is 18% of an earned income we never ask you for, we assume each year’s new room covers what you normally put in, up to the yearly dollar limit. Room you told us about is treated as a buffer for putting in more than usual.
The same rules apply to a partner, using the room you entered for them.
The order your accounts are drawn in
There are three sensible orders, they can differ by thousands of dollars a year, and we run all of them every time and build the plan on whichever supports the most — unless you have chosen one yourself, in which case we use yours.
Ordinary money, then your RRSP, then your TFSA. The general rule. Money in a non-registered account has already been taxed as it grew, so spending it first leaves both sheltered accounts to compound.
Ordinary money, then your TFSA, then your RRSP. For a large registered balance that would otherwise push income past the OAS clawback threshold. A TFSA withdrawal is invisible to the clawback, so spending it first keeps taxable income underneath.
Your RRSP first, then ordinary money, then your TFSA. The meltdown, and what the Guaranteed Income Supplement usually wants — which is the opposite of what the supplement’s arithmetic suggests one year at a time. The supplement is tested every year, so what decides a lifetime of it is how many years are clean. Emptying the RRSP over the first few years loses the supplement in those years and collects it in full for every year after; leaving the RRSP until last means the minimums forced out from 72 reduce it for the rest of your life.
Whichever we use, a tax advisor may recommend a different order for your situation, and the difference over thirty years is real money.
What it leaves out
For a couple: sharing CPP between spouses, spousal RRSPs (counted as belonging to whoever’s account they sit in), a partner’s pay while they keep working after you stop — unless you add it as their income — and the Allowance for a partner aged 60 to 64. Joint accounts count as yours.
Probate, estate tax on what is left behind, and the credits that depend on facts we never ask for.
Money arriving once rather than monthly — selling a rental property, or downsizing a home.
Anything you have not told us about: a workplace pension, income from outside your connected accounts, or money we simply cannot see.
Where the figures come from
Tax brackets, credits and registered-plan limits come from the Canada Revenue Agency and each province’s or territory’s published tables. OAS, GIS and CPP come from Employment and Social Development Canada and Service Canada. QPP and Quebec’s own measures come from Retraite Québec and the Ministère des Finances du Québec. Locked-in fund limits come from the Office of the Superintendent of Financial Institutions and the provincial pension regulators. Provincial senior supplements come from each paying government.
We do not model provincial top-ups to the Guaranteed Income Supplement, provincial health levies, or the yearly ceiling on withdrawals from a locked-in fund. Each affects a small number of people, and each would need re-checking several times a year to stay true — a figure that is quietly a year out of date is worse than one we never claimed. Where you draw heavily on locked-in money in particular, your own plan’s rules may allow less than this projection assumes.
Government figures change every year, and ours are updated when we update them, which is not the same thing. Some move more than once a year: OAS and GIS are re-set quarterly, and several provincial supplements move with them.
Please check it with someone
Before you act on any of this — retiring earlier, contributing more, moving money between accounts — talk to a qualified financial planner or tax advisor about your own situation.
These numbers are estimates, and they will be wrong. Finights is not a financial advisor, a tax advisor or a licensed planner, and nothing here is a recommendation to do or not do anything with your money. We are not responsible for decisions you make using this tool, or for what happens after them. Please confirm anything that matters — especially tax and contribution limits — with a professional who knows your situation.