Am I Ready to Retire? The Canadian Edition

"Am I ready to retire?" is the question everyone asks and almost nobody answers properly. Most people answer it with a feeling. A coworker retired at 60, so maybe you can too. Your advisor said you're "on track." Your portfolio hit a round number.

None of that is an answer. An answer comes from running your actual numbers - what you have, what you spend, how long it has to last, and what happens when the market doesn't cooperate.

So I built a calculator that does exactly that because on paper, I thought I was getting close but the reality surprised me a bit.

Ready isn't a number. It's a plan that survives a bad year.

There is no magic portfolio size. $1 million is plenty for someone spending $3,500 a month with a full CPP and OAS. It's not enough for someone spending $9,000 a month at 55 with 40 years to fund.

Ready means three things are true at once:

• Your money lasts as long as you need it to.
• It still lasts if markets drop hard right after you retire.
• You know how much you can actually spend - not just whether you'll scrape by.

The second point is the one most calculators skip. A 25% drop in your first year of retirement does far more damage than the same drop at 80, because you're selling investments at the bottom to pay the bills. Same average return, very different outcome.

The inputs that actually matter

The calculator below asks for more than a balance and an age, because retirement is more than a balance and an age:

• Your timeline: current age, when you want to stop, and how many years the money has to last.
• Where your money lives: RRSP, TFSA, non-registered and cash. A dollar in each is taxed differently on the way out, so they aren't worth the same.
• What you spend: monthly expenses, plus any mortgage or debt payments that end at a certain age.
• Other income: a workplace pension (indexed or not) and any part-time work.
• Government benefits: your CPP estimate and start age, years lived in Canada for OAS, and an automatic check on whether GIS kicks in or the OAS clawback bites. (New to these? Start with my CPP, OAS and GIS explainers.)
• Taxes: every RRSP withdrawal, CPP and OAS cheque is taxable income. The calculator works out your federal and provincial tax every year, or you can plug in your own average rate. Either way it shows your lifetime tax bill and your worst tax year.
• The market: your expected return, target inflation, and what your cash earns.

Not in Canada? Tick the box at the top of the calculator and the RRSP, TFSA, CPP, OAS and GIS fields switch to generic tax-deferred and tax-free accounts and public pensions you fill in yourself.

Two things to do before you run it (for Canadians)

First, log into My Service Canada Account and get your real CPP estimate. The maximum at 65 is $1,507.65 a month in 2026, but the average new pension is well under that, and guessing high here flatters every result.

Second, use your actual spending, not your hoped-for spending. Pull the last 12 months from your bank and credit card statements. I track ours every month right here on the blog - and the real number always surprises me a little.

The Retirement Readiness Check

How to read your result

You'll get one of three verdicts:

• Yes - you're ready. Your money lasts the full stretch and survives a 25% crash the year you retire. That's ready, not lucky.
• Ready on paper. Thin on cushion. It works if markets behave. The tool tells you how much extra cash or how many more working years would make it crash-proof.
• Not yet. You'll see the size of the gap and three ways to close it: spend less, work longer, or find a lump sum. Usually it's a mix.

Pay the most attention to safe monthly spending. That's the most you can spend and still have the money last exactly as long as you need. If it's well above your plan, you have room - or you could retire sooner. If it's right at your plan, small surprises will hurt.

Then check the benefit cards. If the OAS clawback shows up, your RRSP is probably too big to leave alone until 71. If GIS shows up in your late 80s, that's your RRSP running dry and the government quietly topping you up. Both are signals that the order you spend your accounts in matters - which is exactly what the Drawdown Sequencer is built to figure out.

What it doesn't do

It uses one steady return, and real markets don't move in a straight line. It models one person, so couples should run each spouse separately (pension splitting and couple GIS rules aren't in here). Provincial tax is close but not exact. It's a planning tool, not financial advice.

Run it once a year. Run it before any big decision. Change one input at a time and watch what moves the verdict - that's where the real lesson is. For most people, it's spending, not returns.