What retirement income could my savings support?

By the end of the year you turn 71, you generally must withdraw the RRSP funds, use them to purchase an eligible annuity or transfer them to a RRIF. Many retirees choose a RRIF so the investments can remain tax-deferred while required withdrawals begin.

The future value depends on the current balance, future contributions, investment return, fees and years until retirement. Because returns are uncertain, it is useful to compare several growth scenarios.

You can withdraw from an RRSP before conversion, but withdrawals are generally taxable. After conversion to a RRIF, a minimum annual withdrawal applies, while larger withdrawals are also allowed and taxable.

RRSP and RRIF withdrawals are generally included in taxable income for the year. Withholding tax on a withdrawal is only a prepayment toward final tax and may not equal the actual tax owed when the return is filed.

It depends on the starting balance, withdrawal amount, investment returns, inflation and taxes. A retirement drawdown calculator can test whether a planned level of withdrawals is sustainable under different return assumptions.