Methodology: how the calculators work

Principles

• Every official figure comes from a CRA, Service Canada or Bank of Canada page and is shown with its year or period on the key figures page.
• Every worked example in our guides is calculated by the same code the tools use, so the numbers in articles and tools agree.
• Calculations run in your browser. The tools don't send your inputs anywhere.
• We label estimates as estimates and list what each tool leaves out.

Today's dollars and real returns

The plan model and most tools work in today's dollars. A nominal return you enter is converted to a real return with (1 + return) ÷ (1 + inflation) − 1. CPP and OAS are indexed to inflation, and federal and provincial brackets are indexed in most provinces, so we treat them as constant in today's dollars. A workplace pension you mark as not indexed loses value each year at the inflation rate.

Income tax

Tax applies the 2026 federal brackets and each province's or territory's 2026 brackets, less the federal and provincial basic personal amount credits, plus the Ontario surtax. It leaves out the age amount, pension income amount, other credits, dividend and capital-gains rules, the Ontario Health Premium and provincial low-income reductions, so it usually overstates tax somewhat for retirees. Quebec provincial tax isn't modelled; for Quebec we show federal tax after the 16.5% abatement.

The OAS recovery tax is 15% of individual net income above the threshold for the year ($95,323 for 2026), capped at the OAS received.

CPP and OAS

CPP at a start age is your estimate at 65 × (1 − 0.6% × months before 65) or × (1 + 0.7% × months after 65, to 70). OAS is the maximum for the quarter × (1 + 0.6% × months deferred, to 60) × min(1, years in Canada after 18 ÷ 40), with no OAS under 10 years; the 75-and-over rate is 10% higher. Break-even ages compare cumulative payments month by month, optionally discounted at a real rate.

The plan model, year by year

• Before retirement: contributions are added, then all balances grow at the year's return. Non-registered growth loses 25% of positive returns to tax each year (a simple tax drag).
• In retirement: income is CPP + OAS + pension + other income. From 72, at least the RRIF minimum (January 1 balance × prescribed factor) is withdrawn.
• Shortfalls are met from non-registered savings, then RRSP/RRIF (grossed up for tax with a numerical search), then TFSA. Surpluses go to the TFSA up to the 2026 limit per person, then to non-registered savings.
• Couples are taxed as two people with equal income — an approximation of pension income splitting and CPP sharing.
• The estate value taxes any remaining RRSP/RRIF as income in a single year.

Monte Carlo ranges

Each simulated path draws one real return per year from a normal distribution with your expected return and volatility (returns are floored at −60%). We run 400 paths in the plan tool with a fixed seed (20261030), so the same inputs always give the same result. A path "succeeds" if every year's after-tax spending is fully paid to the planning age. Percentile bands show the 10th, 25th, 50th, 75th and 90th percentile of total savings at each age.

Real markets have fatter tails, streaks and changing inflation that this simple model doesn't capture. Treat the success rate as a way to compare choices, not a probability.

How much do I need?

The estimator finds the gross income needed to net your after-tax spending (by numerical search over the 2026 tax function, including OAS recovery tax), subtracts CPP, OAS and pension income for each year (savings carry the whole gap before benefits start), and discounts each year's gap at the real return you choose. Projected savings use your current balance and yearly saving at the pre-retirement real return.

Withdrawal order and splitting

The withdrawal-order tool runs the plan model four times with different account orders and reports lifetime tax, recovery tax and the after-tax estate. The splitting tool tests every allocation of eligible pension income from 0% to 50% in 1% steps and reports the lowest combined tax and recovery tax.

Testing and review

The calculations are covered by automated checks against hand calculations — for example 2026 federal tax at $60,000, CPP factors at 60/65/70, RRIF factors from the CRA chart, OAS recovery at and above the threshold, and seeded Monte Carlo reproducibility. Official figures are reviewed on the date shown on each page.