How much retirement income do I need in Canada?

A common target is 60 to 70% of pre-retirement gross income, but the precise figure depends on housing costs, debt at retirement, and desired lifestyle. A retiree who owns their home mortgage-free and has no debt may live comfortably on 50% of pre-retirement income. A retiree with a mortgage, significant travel plans, or adult child support may need 80% or more.

What is the maximum combined CPP plus OAS in 2026?

The maximum combined CPP (at age 65) plus OAS (at age 65 with 40 years of residency) in 2026 is approximately $2,166.50 per month, or $26,000 per year. The maximum with OAS deferred to age 70 is approximately $2,444 per month ($29,327 per year). Average combined CPP plus OAS paid to new recipients is closer to $19,000 per year because most Canadians do not qualify for the full CPP maximum.

Can I collect CPP and OAS at the same time?

Yes. CPP and OAS are independent benefits with separate eligibility rules. CPP is available from age 60 and OAS from age 65. Many retirees collect both, with the CPP start age chosen based on contribution history and health and the OAS start age chosen based on net income and life expectancy.

What is the OAS clawback threshold?

The 2026 OAS recovery tax (clawback) threshold is $90,997 of net income. OAS is reduced by 15 cents per dollar of net income above the threshold. OAS is fully clawed back at $148,179 for recipients aged 65 to 74 and $153,771 for recipients aged 75 and older. Net income excludes TFSA withdrawals.

Should I draw from RRSP or TFSA first?

Strategy depends on the retiree's marginal tax rate across years and on OAS clawback exposure. Drawing TFSA first in high-income years (to stay below the $90,997 OAS clawback threshold) and RRSP later is common for retirees near the threshold. Drawing RRSP first for retirees in a permanently low bracket (to reduce RRSP balance and the resulting RRIF minimums) is common when bracket management matters more than clawback.

What is the RRIF minimum withdrawal?

CRA requires a minimum annual withdrawal from a RRIF starting the year after the account is converted from an RRSP, typically at age 72. The minimum rate rises from approximately 5.28% at age 71 to 20% at age 95 and older. The minimum applies to the balance at the start of each year. Withdrawals below the minimum are not allowed; withdrawals above the minimum are permitted but subject to withholding tax.

Does CPP reduce my OAS?

Indirectly. CPP counts toward the net income used to calculate the OAS recovery tax. A retiree with $20,000 CPP, $60,000 RRIF, and other income above $90,997 sees OAS reduced by 15 cents per dollar of net income above the threshold. CPP by itself does not trigger clawback unless combined income crosses the threshold.

When can I retire in Canada?

There is no legal retirement age in Canada. CPP is available from age 60 with an early-start reduction. OAS is available from age 65 with an option to defer to 70 for a bonus. RRSP withdrawals are allowed at any age; RRSPs must be converted to RRIF or annuity by December 31 of the year the account holder turns 71. Most Canadians retire between ages 60 and 67 based on income, health, and pension triggers.

Is pension splitting worth it?

For a couple with meaningful income disparity in retirement, pension splitting on Form T1032 can save several thousand dollars in combined tax per year. Savings come from moving income from a higher marginal bracket to a lower one and from avoiding OAS clawback on the higher earner. A couple with equal retirement incomes sees no benefit from pension splitting.

What about inflation over a 30-year retirement?

Canadian inflation has averaged approximately 2.0% since 1991, the Bank of Canada's target. Over 30 years at 2% inflation, purchasing power declines by approximately 45%. CPP, OAS, and GIS are indexed to CPI and keep pace. RRIF withdrawals from a fixed portfolio do not automatically index; the real value of withdrawals must be planned explicitly.

Can I work while receiving CPP?

Yes. CPP can be collected alongside active employment or self-employment. Contributions may continue (up to age 70) and produce Post-Retirement Benefits added to CPP each January. Employment income does not reduce CPP but does add to net income for OAS clawback and GIS calculations.

How does a defined benefit pension fit?

A defined benefit pension provides a fixed monthly amount based on years of service and final salary. It counts as taxable pension income, is eligible for pension income splitting, and enters the net income figure for OAS clawback and GIS. DB pensions typically reduce reliance on RRSP/RRIF drawdown because they provide a large indexed base of income.

Canada Pension Projection Calculator

Forecast your total retirement income combining CPP, OAS, and RRSP/RRIF drawdown. Flags OAS clawback risk if projected income exceeds the threshold.

Reviewed by Ben Stevenson, Editor Updated April 25, 2026 Source CRA 2026

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The Canada pension projection calculator combines CPP, OAS, Guaranteed Income Supplement, and RRSP/RRIF drawdown into a single annual retirement income forecast. The calculator flags OAS recovery tax (clawback) risk when projected net income exceeds the $95,323 threshold in 2026 and shows the year-by-year income stream across a 30-year retirement horizon. It is designed for pre-retirees who want to see how all income sources interact before committing to start ages for CPP and OAS.

What does a typical Canadian retirement income look like?

For a single Canadian who worked full-time and retires at 65 in 2026 with maximum CPP ($1,364.60/month), full OAS ($743.05/month), and $400,000 in RRSP savings drawing $24,000 per year, total pre-tax income is approximately $52,000. After federal and Ontario tax, take-home is approximately $45,000. The RRSP/RRIF portion is depleted over 16 to 18 years at that withdrawal rate, which is why the projection shows income declining in later years unless TFSA or non-registered savings supplement withdrawals. For a couple with two CPP entitlements, the picture is substantially different.

How the projection is built

CPP retirement benefit

The Canada Pension Plan retirement benefit is determined by contributions made throughout the working career. The maximum CPP retirement benefit for new recipients in 2026 is $1,364.60 per month at age 65. The actual benefit depends on the contributor’s earnings history relative to the Year’s Maximum Pensionable Earnings (YMPE) in each year of contribution. The calculator takes either a dollar amount (from a CPP statement of contributions available through My Account at CRA) or an estimated percentage of maximum as the input. Taking CPP before 65 reduces it by 0.6% per month of early receipt; taking it after 65 increases it by 0.7% per month of deferral (8.4% per year) to a maximum of 42% at age 70.

OAS and clawback

Old Age Security begins at 65 (maximum $743.05/month in January 2026) and can be deferred to 70 with a 0.6% per month increase (7.2% per year, or 36% total). The projection adds OAS to net income in each year and compares the total to the clawback threshold ($95,323 in 2026, indexed annually). In years where projected net income exceeds the threshold, the OAS amount is reduced by 15% of the excess and flagged as a clawback risk. This is particularly relevant when RRIF withdrawals and CPP together push income above the threshold in early retirement years, before RRIF balances decline.

GIS interaction

If CPP plus OAS plus other income falls below approximately $22,000 for a single recipient or $29,000 combined for a couple, the Guaranteed Income Supplement provides additional non-taxable income. The projection models GIS eligibility based on the income inputs, adding the applicable GIS amount (up to $1,086.88/month for singles in 2026) in years where income falls below the GIS phase-out threshold. GIS is lost when income rises, so the projection models the transition year when RRSP or RRIF income begins, showing GIS reduction or elimination.

RRSP and RRIF drawdown

The RRSP balance grows at the chosen pre-retirement return rate until the first withdrawal year. By age 71, the RRSP must be converted to a RRIF (or purchased as a life annuity). The RRIF minimum withdrawal schedule applies: for 2026, the minimum withdrawal rate for age 71 is 5.28% of the January 1 balance. The rate increases annually: to 5.40% at 72, 5.53% at 73, and so on to a maximum of 20.00% at age 95+. The projection can model a specific withdrawal amount each year or the minimum, showing when the RRIF is depleted and how much remains at the end of the horizon.

TFSA and non-registered income

TFSA withdrawals are not included in net income for any purpose — they do not affect GIS, OAS clawback, or income-tested provincial benefits. The projection allows a separate TFSA balance that grows tax-sheltered and is drawn from in years specified by the user, without affecting any income-tested calculation. Non-registered investment income (interest, dividends, capital gains) is included in net income and is modelled on the input portfolio balance and yield assumption.

Verified against source

CPP maximum retirement benefit and start-age adjustment rates are confirmed from Service Canada’s CPP payment amounts page and the Canada Pension Plan Act s.67.1. OAS maximum benefit and deferral rate are confirmed from Service Canada’s OAS payment amounts page. RRIF minimum withdrawal factors are confirmed from Income Tax Regulation 7308 and the CRA RRIF page. The OAS clawback threshold of $95,323 for the July 2025 to June 2026 benefit period is confirmed from the CRA OAS recovery tax page. These figures were verified in April 2026.

RRIF minimum withdrawal schedule — reference

Age	Min. withdrawal rate	Example: $300,000 balance
71	5.28%	$15,840
72	5.40%	$16,200
75	5.82%	$17,460
80	6.82%	$20,460
85	8.51%	$25,530
90	11.92%	$35,760
95+	20.00%	$60,000

Minimum withdrawal rates apply to the January 1 balance of the RRIF account. Many retirees draw more than the minimum in early years. Drawing above the minimum while rates are lower (before age 80) can reduce future mandatory withdrawals and preserve GIS eligibility or reduce OAS clawback in later years.

CPP start age: the key decision

The CPP start-age decision is one of the most consequential and irreversible choices in Canadian retirement planning. The breakeven between taking CPP at 60 vs 65 is approximately age 73 to 75 in most scenarios: recipients who live past that age accumulate more lifetime CPP by waiting to 65. The breakeven for waiting from 65 to 70 is approximately age 82 to 84. Statistics Canada’s life tables show that a 65-year-old Canadian can expect to live to approximately 85 (male) or 88 (female), meaning most people statistically come out ahead by deferring CPP to at least 65.

Other factors in the CPP start-age decision: need for income before 65 (if RRSP and other income are insufficient); survivor benefit considerations (the spouse with higher CPP should generally defer); tax rate in early retirement years (if marginal rates are high due to high RRIF withdrawals, deferring OAS and CPP while drawing down RRIF reduces future clawback risk); and personal health factors that affect life expectancy.

Income sequencing strategy

The order in which income sources are drawn in retirement has a significant impact on total after-tax wealth. A general framework for lower-to-medium income retirees:

Pre-65: Draw RRSP in early retirement at lower marginal rates, before OAS and CPP begin. This converts high-income-producing registered savings to TFSA or non-registered, reducing future mandatory RRIF withdrawals.
65–71: Begin OAS (or defer if high RRIF income expected). Draw RRSP at minimum or target income level. Optimise GIS eligibility where applicable by limiting RRSP/RRIF withdrawals.
71+: Convert RRSP to RRIF. Draw TFSA in years where RRIF mandatory withdrawals exceed income needs, to avoid clawback. Take CPP at the age that maximises lifetime income given health and income needs.

This framework is a starting point; the optimal sequence depends on the individual’s account balances, health, provincial tax rates, spouse’s income, and estate goals.

Methodology

Projects annual gross income from CPP (with early-start or deferral adjustment), OAS (with residency, deferral, and recovery tax), GIS (for income below the cut-off), RRIF (at CRA minimum or user rate, whichever is higher), TFSA (at user withdrawal rate), non-registered portfolio (compounded at chosen return), and employer pension (fixed or indexed). Income totals annually for 30 years. OAS recovery tax applies to gross OAS when projected net income exceeds $90,997 in 2026. Pension income splitting is available as a toggle and splits up to 50% of eligible pension and RRIF income. GIS is computed from combined household income after earnings exemption. All figures are nominal; inflation adjustment uses the chosen rate (default 2.0%).

Frequently asked questions

How much retirement income do I need in Canada?: A common target is 60 to 70% of pre-retirement gross income, but the precise figure depends on housing costs, debt at retirement, and desired lifestyle. A retiree who owns their home mortgage-free and has no debt may live comfortably on 50% of pre-retirement income. A retiree with a mortgage, significant travel plans, or adult child support may need 80% or more.
What is the maximum combined CPP plus OAS in 2026?: The maximum combined CPP (at age 65) plus OAS (at age 65 with 40 years of residency) in 2026 is approximately $2,166.50 per month, or $26,000 per year. The maximum with OAS deferred to age 70 is approximately $2,444 per month ($29,327 per year). Average combined CPP plus OAS paid to new recipients is closer to $19,000 per year because most Canadians do not qualify for the full CPP maximum.
Can I collect CPP and OAS at the same time?: Yes. CPP and OAS are independent benefits with separate eligibility rules. CPP is available from age 60 and OAS from age 65. Many retirees collect both, with the CPP start age chosen based on contribution history and health and the OAS start age chosen based on net income and life expectancy.
What is the OAS clawback threshold?: The 2026 OAS recovery tax (clawback) threshold is $90,997 of net income. OAS is reduced by 15 cents per dollar of net income above the threshold. OAS is fully clawed back at $148,179 for recipients aged 65 to 74 and $153,771 for recipients aged 75 and older. Net income excludes TFSA withdrawals.
Should I draw from RRSP or TFSA first?: Strategy depends on the retiree's marginal tax rate across years and on OAS clawback exposure. Drawing TFSA first in high-income years (to stay below the $90,997 OAS clawback threshold) and RRSP later is common for retirees near the threshold. Drawing RRSP first for retirees in a permanently low bracket (to reduce RRSP balance and the resulting RRIF minimums) is common when bracket management matters more than clawback.
What is the RRIF minimum withdrawal?: CRA requires a minimum annual withdrawal from a RRIF starting the year after the account is converted from an RRSP, typically at age 72. The minimum rate rises from approximately 5.28% at age 71 to 20% at age 95 and older. The minimum applies to the balance at the start of each year. Withdrawals below the minimum are not allowed; withdrawals above the minimum are permitted but subject to withholding tax.
Does CPP reduce my OAS?: Indirectly. CPP counts toward the net income used to calculate the OAS recovery tax. A retiree with $20,000 CPP, $60,000 RRIF, and other income above $90,997 sees OAS reduced by 15 cents per dollar of net income above the threshold. CPP by itself does not trigger clawback unless combined income crosses the threshold.
When can I retire in Canada?: There is no legal retirement age in Canada. CPP is available from age 60 with an early-start reduction. OAS is available from age 65 with an option to defer to 70 for a bonus. RRSP withdrawals are allowed at any age; RRSPs must be converted to RRIF or annuity by December 31 of the year the account holder turns 71. Most Canadians retire between ages 60 and 67 based on income, health, and pension triggers.
Is pension splitting worth it?: For a couple with meaningful income disparity in retirement, pension splitting on Form T1032 can save several thousand dollars in combined tax per year. Savings come from moving income from a higher marginal bracket to a lower one and from avoiding OAS clawback on the higher earner. A couple with equal retirement incomes sees no benefit from pension splitting.
What about inflation over a 30-year retirement?: Canadian inflation has averaged approximately 2.0% since 1991, the Bank of Canada's target. Over 30 years at 2% inflation, purchasing power declines by approximately 45%. CPP, OAS, and GIS are indexed to CPI and keep pace. RRIF withdrawals from a fixed portfolio do not automatically index; the real value of withdrawals must be planned explicitly.
Can I work while receiving CPP?: Yes. CPP can be collected alongside active employment or self-employment. Contributions may continue (up to age 70) and produce Post-Retirement Benefits added to CPP each January. Employment income does not reduce CPP but does add to net income for OAS clawback and GIS calculations.
How does a defined benefit pension fit?: A defined benefit pension provides a fixed monthly amount based on years of service and final salary. It counts as taxable pension income, is eligible for pension income splitting, and enters the net income figure for OAS clawback and GIS. DB pensions typically reduce reliance on RRSP/RRIF drawdown because they provide a large indexed base of income.