Retirement Calculator Canada

RRSP: contributions reduce taxable income now, taxed on withdrawal. Best when you're in a high tax bracket now (e.g. 30%+) and expect to be in a lower bracket in retirement. TFSA: no deduction now, but ALL growth and withdrawals tax-free forever. Best when you're in a lower bracket now or expect to be in a higher bracket later. Most Canadians use BOTH: TFSA first (especially if income is moderate), then RRSP for tax relief.

RRSP: 18% of previous year's earned income, max $32,490 in 2026. Unused room carries forward indefinitely. TFSA: $7,000/year in 2026 (was $6,500 in 2023). Cumulative limit since 2009 (for those 18+ since then) is now ~$102,000. Check your contribution room on CRA's My Account.

The Canada Pension Plan (CPP) provides monthly retirement income based on your lifetime contributions. Max CPP (full benefit, starting at 65) is ~$1,433/month in 2026, but most Canadians get less because of incomplete contribution history. Average is ~$830/month. CPP enhancement (post-2019) will gradually increase max benefits for younger workers. Combined with OAS (~$735/month), the government provides a base of ~$2,200/month — supplemented by RRSP/TFSA.

First-time homebuyers can withdraw up to $60,000 from their RRSP (raised from $35,000 in 2024) tax-free for a home down payment. You must repay it back to your RRSP over 15 years (starting in year 2) — or the unpaid amount each year is added to your income. Useful for getting into the market but pause your retirement savings if you take advantage of this.

Anytime — but withdrawals are taxed as ordinary income in the year withdrawn, with mandatory withholding (10-30% depending on amount). At age 71, you must convert your RRSP to a RRIF (Registered Retirement Income Fund) or annuity, then take minimum withdrawals annually. There are no early-withdrawal penalties beyond the regular tax — unlike US 401(k) — but you'd pay full tax.

Long-term Canadian/global equities have returned ~7-9% nominal. After fees (~0.5-2%) and inflation (~2-3%), real returns are ~4-6%. For a balanced 60/40 stocks/bonds portfolio, use 6% as a baseline. The calculator separates nominal and real — focus on the real (today's money) figure for retirement planning purchasing power.

Rule of thumb: TFSA first if your marginal tax rate is below 30%. RRSP first if you're in the 30%+ bracket (Ontario over ~$57k, BC over ~$58k, etc.). For people in the 40%+ bracket, RRSP gives a massive immediate tax break that often dwarfs TFSA flexibility. Pro tip: contribute to RRSP, then use the tax refund to fund your TFSA. Best of both worlds.

Eligible pension income (including RRIF withdrawals at 65+) can be 'split' with your spouse for tax purposes — up to 50%. This can save thousands annually if one spouse has substantially more pension income. Doesn't apply to regular RRSP withdrawals before 65. Worth knowing about for retirement planning.