Retirement Savings Goal Calculator

The amount you need depends on your desired retirement income, expected CPP and OAS benefits, years until retirement, and investment returns. A common benchmark is the '4% rule': divide your annual income need from savings by 0.04 to find the nest egg required. For example, if you need $30,000/year from savings, you need $750,000 saved at retirement. This calculator automates that math for your specific situation.

The 4% rule states that you can withdraw 4% of your portfolio per year (adjusted for inflation) and have a high probability of not running out of money over a 30-year retirement. It originated from US research (the Trinity Study) but is widely used as a planning benchmark in Canada. For a more conservative plan, some advisors use 3.5% or 3%, especially for longer retirements. This calculator uses 4% as its default assumption.

Both accounts are valuable but serve different purposes. RRSP contributions reduce your taxable income today (beneficial if you're in a high bracket) but withdrawals are fully taxable in retirement. TFSA contributions are made with after-tax dollars, but all growth and withdrawals are completely tax-free. In retirement, TFSA withdrawals don't affect your OAS clawback or income-tested benefits. Most Canadians benefit from using both — RRSP first if your income is high today, TFSA first if you expect to be in a similar or higher bracket in retirement.

CPP and OAS are guaranteed government income sources that reduce the income you need to draw from your personal savings. For example, if you want $4,000/month in retirement and expect $800/month from CPP and $752/month from OAS, your savings only need to cover the $2,448/month gap. Applying the 4% rule, this means you need about $734,400 in savings — significantly less than the $1,200,000 you'd need without any CPP or OAS. Check your personal CPP estimate at My Service Canada Account.