Using a retirement calculator Canada can quickly show whether your current savings and contributions will meet your retirement income goals. A retirement projection tool helps you estimate future savings, expected income (CPP/OAS, workplace pensions, RRSP/RRIF, TFSA withdrawals), and shortfalls so you can plan actionable steps.
Why use a retirement projection tool?
Quick snapshot: Illustrates projected income vs. target spending.
Scenario testing: Compare retiring earlier or later, different return rates, or higher saving rates.
Decision support: Helps decide RRSP vs. TFSA prioritization, or whether to delay CPP.
Before you start: gather your inputs
Age and planned retirement age — exact or a range.
Current balances — RRSP, TFSA, non-registered investments, workplace pension, RESP (if relevant).
Annual contributions — your expected future contributions to RRSP/TFSA and employer pension contributions.
Income today — for tax and replacement-rate estimates.
Pension details — pension formula, indexation, survivor benefits.
Expected retirement income needs — target annual income in today's dollars.
Assumptions — expected rate of return, inflation rate, and life expectancy.
Use statements and official sources to confirm numbers:
Check registered account details via CRA My Account.
Review government pensions at Service Canada — Canada Pension Plan (CPP) and Old Age Security (OAS).
Step-by-step: how to use a retirement projection tool
Choose a reputable tool.
Start with trusted Canadian options such as the Financial Consumer Agency of Canada — Retirement Income Calculator or calculators from major banks and credit unions.
Enter personal details.
Input age, retirement age, current savings, and expected contributions.
Add pension and government benefits.
Include CPP and OAS estimates; note whether you plan to start CPP early or defer it.
Set realistic assumptions.
Rate of return: use conservative figures (e.g., 3–6% real/nominal depending on mix).
Inflation: Canada's long-term target is about 2%; many users test 2–3%.
Specify retirement spending.
Enter desired annual income in today's dollars or as a replacement percentage of pre-retirement income.
Run scenarios (stress test).
Create at least three scenarios: pessimistic (lower returns/higher inflation), base case, and optimistic.
Review outputs:
Look at projected account balances, income gaps, and whether you meet longevity needs.
Adjust and plan.
If there's a shortfall, increase contributions, delay retirement, change withdrawal rates, or rebalance investments.
What to watch for — common assumptions and pitfalls
Overly optimistic returns: Many people overestimate long-term returns. Use conservative assumptions for planning.
Ignoring fees and taxes: Account for management fees and taxes on withdrawals (RRSP/RRIF are taxable; TFSA is not).
CPP timing impact: Starting CPP earlier reduces monthly payments; delaying increases them up to age 70.
Sequence of returns risk: Early down markets in retirement can magnify shortfalls.
Healthcare and long-term care costs: These can rise with age and aren't fully covered by public plans.
Quick checklist before finalizing your plan
- Confirm CPP/OAS estimates at Service Canada.
- Verify contribution room and past contributions via CRA My Account.
- Consider housing equity or downsizing; review options at Canada Mortgage and Housing Corporation (CMHC).
- Re-run projections annually or after major life changes.
When to seek professional help
Complex pensions, taxation, or large estates: Consult a certified financial planner (CFP).
If projections show persistent shortfalls: A planner can model tax strategies, optimal CPP timing, and asset allocation.
For advice on decumulation strategies: A professional helps manage RRIF withdrawals, Guaranteed Income plans, and annuities.
Useful resources: