Retirement Withdrawal Calculator

Don't get stuck having to retire from your retirement. Our Retirement Withdrawal Calculator generates a withdrawal schedule so you know how much you can withdraw from your investments each month during your retirement.

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What is a Retirement Withdrawal Calculator?

Canadians have a range of retirement planning options available to them. Perhaps the most common tool is the Registered Retirement Savings Plan (RRSP). By making regular RRSP deposits through his or her career, a person can exempt those funds from being taxed in the year that they are contributed. Any growth (via dividends, capital gains, etc.) then grows on a tax-deferred basis provided that the money remains contributed into the RRSP and not withdrawn.

At the time of retirement (stipulated at age 71 by the government), the RRSP funds must be withdrawn or converted into a Registered Retirement Income Fund (RRIF). The RRIF can then be used to withdraw money to meet your expense obligations in retirement. You can withdraw as much as you like from the RRIF each year, subject to a minimum annual amount set forth by federal regulations. In the meantime, your money transferred from the RRSP to RRIF will continue to grow on a tax-deferred basis.

The Retirement Withdrawal Calculator was created with the objective of helping people understand how much they can afford to make in retirement withdrawals from their investments to maintain their desired standard of living. Some of its primary uses include:

  • Understanding “how much can I withdraw from my retirement savings each month”
  • Assessing the rate of return that your investments need to earn to fund your expenses in retirement comfortably
  • Evaluating how different withdrawal rates and years of withdrawals impact the nest egg you have built over the years
  • Calculating the total amount of savings you can leave as inheritance for your beneficiaries based on the amount you have remaining at the end of your projected retirement


How to use the Hardbacon Retirement Withdrawal Calculator

The Hardbacon Retirement Withdrawal Calculator was designed to help impending retirees determine how much they can withdraw from their accounts each month without depleting the amounts they had saved up. At its core though, the calculator is available to all users – regardless of age – to make the right decisions now that will ultimately facilitate a comfortable retirement.

To use the calculator, you need to enter the following:

Value of your investments: Think of this as the value of your investment portfolio on Day 1 of your retirement. This number should reflect the total value of the funds in your investment account right before you make your first-ever withdrawal in retirement.

Desired monthly withdrawal: The desired monthly withdrawal is the amount that you plan to take out from your investment account on a monthly basis in retirement.

Expected rate of return: This is the rate of return that you can reasonably expect your portfolio to earn on the markets per year on average over the specified number of years that you have input for your retirement.

Years of withdrawals: Put simply, this is the length (in years) that you envision needing to draw down on your retirement fund.


Understanding the results of the Retirement Withdrawal Calculator

Once you have input all of the requisite fields into the calculator, you can turn your attention to the right of the screen to see the results of your retirement plan.

Total withdrawal amount: This is a simple calculation that demonstrates the cumulative withdrawals you expect to make over your retirement. To verify this calculation, you simply need to multiply your ‘desired monthly withdrawal’ by 12 to get the withdrawals you will make on an annual basis. Then multiply that number by the number you have entered in ‘years of withdrawals’. This number should match what you see under ‘Total withdrawal amount’. 

Total gain on your investments: The gain on your investments is the total amount that you can expect to make in interest, capital gain and dividends at the end of the projected period, based on the rate of return that you have projected.

Balance remaining at the end of the period: The balance remaining at the end of the period is a number contingent on your monthly withdrawal rates and monthly interest earned. For example, if you started with $150,000 in investments earning a 7% annual return with $800 in annual withdrawals, your balance remaining might look something like this:

  •  Month 1:  $150,000 will result in $870.33 in interest earned at the end of Month 1. After $800 in withdrawals, you will be left with about $70 in income. At the end of Month 1, your balance will therefore be $150,000 + $70 = $150,070.
  •  Month 1:  $150,070 will result in $870.74 in interest earned at the end of Month 2. After $800 in withdrawals, you will be left with about $71 in income. At the end of Month 2, your balance will therefore be $150,070 + $71 = $150,141.
  •  And so on…


Learn more about the Retirement Withdrawal Calculator Inputs

While the outputs are automatically calculated, it is important to ensure that you have input the right numbers to give you the most reliable results. Retirement planning is an important topic, so you really don’t want to leave much to chance! Use our guide below to understand more about each input number and where you can pull it from.


Value of your investments: Your value of investments is the total amount that you expect to have built up at the time of your retirement. If you invest a set amount each month or year, use our Automatic Investment Calculator to determine how much you can expect your portfolio to have grown to by the time you are ready to retire.

Desired monthly withdrawal: This number is entirely based on your own discretion. Depending on the type of retirement lifestyle you envision living, you can input the appropriate number here. A good way to calculate this number is to create a personal budget where you start with all the inflows you will expect to receive in retirement. While you obviously won’t have a job salary at the time, you may receive a pension, dividends from stocks you have invested in, etc. Next, deduct the expenses that you expect to incur. These can include rent or mortgage payments, groceries, entertainment, and any other expenses you see fit. Once you subtract the outflows from the inflows, the number you are left with is likely your desired monthly withdrawal.

Expected rate of return: This is the rate of return that you can expect to earn each year on the amount you have invested in the markets. Note that this rate of return should be reflective of the portfolio you anticipate having in retirement. While your portfolio may comprise of growth stocks when you are younger, your risk appetite will likely diminish as you grow older. As such, you will probably have a greater weighting of less riskier assets than stocks (such as bonds or real estate). For reference, the average return on stocks is between 7% to 10%. The average return on bonds is 3% to 6%.

Years of withdrawals: This is once again an entirely discretionary number that depends on your expectations of longevity. While most people retire around 65, a study by the World Bank estimated that the average life expectancy for Canadians is around 82.

Frequently Asked Questions

  • 1. How much tax is paid on RRSP withdrawal at retirement?

    When funds are withdrawn from an RRSP, the financial institution will withhold tax. The taxation rate depends on the province you live in and the amount you are planning to withdraw. In term of Canadian federal taxes, this is what you can expect to pay : 

    • 10% on any amount up to $5,000
    • 20% on any amount from $5,001 up to and including $15,000
    • 30% on any amount that is $15,001 and over


  • 2. Can you withdraw from your RRSP early?

    funds are not in a locked-in plan. The amount that you withdraw will be subject to a withholding tax and will have to be included as an income source when the person files their taxes next.

    However, if this early withdrawal can be avoided, it should be. This is because by making an early withdrawal, you are sacrificing the compound growth on your investment in the market. Perhaps most importantly though, you cannot regain that contribution room in a future year per CRA policy. Once withdrawn, you lose that contribution amount forever. As such, if you are truly in an emergency, a better option would be to withdraw funds from your TFSA (if that is an option available to you) or try and secure a low-cost personal loan from a lender.

    Of course, there are a few instances when it does make sense to withdraw early from an RRSP:

    • If you are looking to take advantage of the Home Buyers’ Plan which allows you (and your spouse) to each withdraw funds up to $35,000 without any withholding tax. However, the amount you withdraw has to be replenished within 15 years since it is considered as a ‘loan’.
    • If you want to use the Lifelong Learning Plan where you can withdraw a total of $20,000 (maximum of $10,000 in a single calendar year). This amount is also considered as a ‘loan’ and has to be repaid within 10 years.

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