Retirement Drawdown Strategy
Which account do you draw from first once you retire, the RRSP, the TFSA, or your non-registered savings? This tool simulates all three plans year by year to age 95 with real 2026 tax brackets, RRIF minimums and the OAS clawback, then shows which one leaves you more after tax.
Rates & rules verified · July 2026Primary sources: CRA – Receiving income from a RRIF · Canada.ca – CPP payment amounts · CRA – Tax rates and income brackets
Total portfolio by age
Combined RRSP + TFSA + non-registered balance each year, for all three strategies. Where a line hits zero, that plan has run out of money.
Winner's account composition
How the winning plan draws its accounts down over time, the order the money comes out.
Year-by-year plan
The winning strategy in detail: what comes out of each account, the tax you pay, and any OAS clawed back. Highlighted rows are age 71 (RRIF minimums begin) and any year money runs out.
| Age | RRSP | TFSA | Non-reg | Tax | OAS clawed | Portfolio |
|---|
How this is calculated
The three strategies
RRSP first drains the RRSP/RRIF to zero, then non-registered, then the TFSA. TFSA first spends the TFSA, then non-registered, then the RRSP. Blended meltdown takes each year's mandatory RRIF minimum, then draws just enough extra RRSP to fill the low tax brackets (up to the OAS clawback line of $93,454), tops up from non-registered savings, and leaves the TFSA for last.
Everything is in today's (real) dollars
Your spending stays constant in today's dollars, and balances grow at the real return (1 + nominal) / (1 + inflation) − 1. Because the CRA indexes the tax brackets, the basic personal amount and the OAS recovery threshold to inflation every year, they hold their value in real terms, so keeping them at 2026 levels is exactly right on this basis (and avoids a subtle bug where frozen brackets would over-tax nominally-inflating income late in a long retirement). CPP and OAS are quoted as their real (indexed) amounts and are taxable.
When CPP and OAS start
The amount you enter is your combined CPP + OAS payable at 65. We claim each at your retirement age, gated to the statutory floors, CPP no earlier than 60, OAS no earlier than 65, and apply the permanent actuarial adjustment: CPP drops 0.6%/month before 65 (−36% at 60) or rises 0.7%/month after (+42% at 70); OAS rises 0.6%/month of deferral (+36% at 70). So retiring at 60 draws a reduced CPP and no OAS until 65. To optimise when to start, use the CPP timing calculator.
Each year, solved for after-tax spending
We solve, by bisection, the gross withdrawals that leave exactly your after-tax need in hand: net = CPP + OAS + withdrawals − tax. Whatever the plan doesn't spend keeps growing at the real return.
The tax on each withdrawal
RRSP/RRIF withdrawals are ordinary income. Non-registered withdrawals are taxed only on the gain portion, at the 50% capital-gains inclusion rate, we approximate the taxable gain as withdrawal × gain% × 50% (a constant gain fraction, rather than tracking the adjusted cost base of every lot). TFSA withdrawals are tax-free. Tax runs over the 2026 federal and provincial brackets, after the federal and provincial basic personal amount credits, plus Ontario's surtax and health premium where they apply.
RRIF conversion and minimums
By the end of the year you turn 71 an RRSP must become a RRIF. A mandatory minimum then applies each year, 5.28% of the January-1 balance at 71, climbing to 20% at 95 (CRA factors). Every strategy is forced to take at least this minimum, which is why hoarding the RRSP eventually backfires with a spike of taxable income. (We apply the minimum from 71; strictly, the first required minimum is for the year after conversion, but the one-year difference is immaterial to the comparison.)
The OAS clawback
Net income above the recovery threshold ($93,454, 2025 income year) claws back OAS at 15%, up to your full OAS. RRSP/RRIF income and taxable capital gains count toward it; TFSA withdrawals do not.
Comparing after-tax estates
At 95 we value what's left after tax: the residual RRSP/RRIF is taxed as a lump-sum deemed withdrawal on the final return, only the gain in the non-registered account is taxed, and the TFSA passes tax-free. Comparing raw balances would unfairly flatter a big untouched RRSP.
What this does not model
The pension income credit and pension income splitting at 65 (both can materially cut RRIF-income tax for couples) are not modelled, treat the tax shown as a conservative single-person estimate. Also excluded: GIS, provincial credits and clawbacks beyond those in our data, variable returns and sequence-of-returns risk, RRSP-to-RRIF conversion timing choices, in-kind transfers, and the actual cost base of each non-registered lot (we use a flat gain fraction). Benefits are claimed at your retirement age (CPP floored at 60, OAS at 65) with the standard actuarial adjustment; to optimise when to start CPP and OAS, use the CPP timing calculator. One real-basis caveat: Ontario's Health Premium is not indexed to inflation, so holding it at its 2026 level modestly overstates its real bite late in a long retirement. See also retirement savings and RRSP vs TFSA. Rules and rates verified July 2026.
Common questions
Which account should I withdraw from first in retirement?
There is no single answer, but for most Canadians with a large RRSP/RRIF the winning move is a blended meltdown: draw enough RRSP each year to fill the low tax brackets, top up from non-registered savings, and leave the TFSA for last. This smooths your marginal tax rate, avoids a spike in forced RRIF income after 71, keeps you under the OAS clawback threshold, and leaves the most after-tax money to your estate because the tax-free TFSA passes on untouched.
What is the RRIF minimum withdrawal and when does it start?
An RRSP must be converted to a RRIF (or annuity) by the end of the year you turn 71. A mandatory minimum then applies each year, starting at 5.28% of the January 1 balance at 71 and rising to 20% by age 95. These forced withdrawals are fully taxable, which is why leaving a big RRSP untouched can backfire, a tax-free TFSA has no such forced withdrawal.
How does the OAS clawback work in 2026?
Old Age Security is reduced by 15 cents for every dollar of net income above the recovery threshold, about $93,454 for the 2025 income year. A large RRSP or RRIF withdrawal can push you over the line and claw back thousands of OAS dollars. TFSA withdrawals do not count as income, so they never trigger the clawback.
Why compare estates on an after-tax basis?
A dollar left in an RRSP or RRIF is not really yours, on death the entire balance is deemed withdrawn and taxed as income on your final return, often at close to 50%. A dollar in a TFSA passes tax-free, and only the gain in a non-registered account is taxed. Comparing raw balances flatters the TFSA-first strategy; comparing after-tax estate value shows which plan actually leaves your heirs more.
Is the RRSP meltdown strategy always best?
No. If your portfolio is small relative to your spending and running out is the real risk, keeping the tax-free TFSA in reserve and letting the RRSP compound can make the money last longer in nominal terms. The meltdown wins when you expect to leave an estate; preserving the TFSA wins when longevity is the worry. This tool shows both outcomes so you can see which case you're in.