How Long Will My Retirement Savings Last?

This page focuses on portfolio longevity: whether savings can keep funding the gap after other income. It is not a nest-egg sizing guide (how much you may need), not a fixed “is $1 million enough?” scenario (retire with $1 million), and not the calculator overview (retirement calculator). Those pages answer different questions.

Why portfolio ÷ spending is incomplete

If someone has $800,000 and spends $40,000 a year, simple division suggests 20 years. That math assumes no investment growth, no inflation, no CPP, no OAS, no pension, and no tax on withdrawals. In a Canadian plan those omissions are usually large. Benefits can extend how long savings last. Taxes and inflation can shorten comfortable years. Market returns-and their order-can do either.

What actually drives how long savings last

1. Starting portfolio: size and account mix (RRSP, TFSA, non-registered) set the after-tax capacity to fund spending.
2. Retirement spending: the clearest driver of drawdown speed.
3. CPP, OAS, and pension income: every dollar of reliable income is a dollar the portfolio may not need to supply. Timing matters; see when to take CPP and when to take OAS.
4. Taxes: taxable withdrawals often require taking out more than the spending dollar you keep.
5. Inflation: raises the future spending the plan must fund in nominal terms.
6. Investment returns: long-run assumptions matter, but they are not guarantees.
7. Sequence of returns: early losses while withdrawing can matter more than the average return (expanded below).
8. Retirement age: earlier retirement means more years to fund. See retiring at 60.
9. Longevity / planning horizon: planning to 95 is a different problem from planning to 85.
10. One-time expenses: renovations, vehicles, family help, or care costs can pull large amounts in a single year.
11. Spending changes: some households spend more early in retirement and less later; others face rising health-related costs.
12. Account mix: RRSP/RRIF minimums, TFSA flexibility, and taxable accounts change how withdrawals hit the plan. See RRSP withdrawal strategy.

Sequence of returns in plain terms

Two retirees can earn the same average return over 25 years and still finish with very different balances if one suffers weak markets in the first years while withdrawing. Early losses plus withdrawals shrink the base that later recoveries can compound on. A strong market early, with withdrawals funded partly by gains, leaves more capital for later years.

That is why a fixed “years of spending” shortcut is a weak substitute for a year-by-year view. Sequence risk does not mean markets will crash when you retire. It means the order of returns can change longevity even when the long-run average looks acceptable. Stress-testing lower early returns (or higher early spending) is more informative than trusting a single average-return line.

Rules of thumb are not duration guarantees

Guidelines such as withdrawing about 4% of a starting portfolio, or targeting roughly 25 times annual spending from investments, come from research contexts that often differ from a tax-aware Canadian household with CPP and OAS. They can be rough heuristics for sizing conversations. They are not guarantees that savings will last a set number of years, and they do not replace modelling benefits, taxes, and account types.

Why the same starting balance can “last” differently

• Lower returns: weaker growth leaves less room for withdrawals and inflation.
• Higher spending: even a few thousand dollars more per year can shorten the comfortable horizon quickly.
• Earlier retirement: more years before CPP/OAS (or before a full pension) increase the bridge the portfolio must carry.
• Market decline early in retirement: sequence risk can force selling more units at lower prices, leaving a smaller base for recovery.

These are qualitative directions, not deterministic projections. RetireIQ does not invent a single end date for your money on this page.

A practical way to test longevity

1. Estimate spending in today's dollars, including likely one-time costs.
2. Add CPP, OAS, and pension income with realistic start ages.
3. Enter balances by account type.
4. Choose return and inflation assumptions you are willing to defend-and a lower-return case.
5. Project to a late planning age and compare higher spending or earlier retirement.

When you want to apply this to your balances, run a longevity projection in RetireIQ after reading the concept here.