RetirementPath

Method & sources

Useful for decisions. Honest about uncertainty.

This planner compares practical scenarios; it cannot guarantee the lowest tax or highest lifetime benefit. A lower tax bill does not always mean more lifetime income.

Inflation & purchasing power

Why there is no separate inflation input

RetirementPath is a real-dollar model. Every dollar amount you enter or see is expressed in today’s Canadian dollars, so it represents purchasing power rather than the larger number of dollars you may actually receive or spend in a future year.

Use real growth rates

Investment return is entered after inflation and fees. A 2% real return means purchasing power grows by 2% a year. Likewise, 0% real employment-income growth means pay keeps pace with inflation.

Fixed means inflation-linked

Spending, annual savings, cash, pensions, and other amounts without a growth input stay constant in today’s dollars. This effectively assumes they keep pace with inflation; unindexed pensions or idle cash may have less future purchasing power than shown.

Current rules remain a snapshot

2026 tax brackets, benefits, and contribution limits are applied in today’s-dollar terms. The planner does not forecast future law changes or year-to-year inflation.

One technical exception: a non-registered investment’s adjusted cost base is a nominal tax record. The planner uses a fixed 2.1% annual inflation assumption only to keep that cost base consistent with the real-dollar projection. This rate comes from FP Canada’s 2026 Projection Assumption Guidelines ; actual inflation will differ.

What the model includes

  • 2026 federal and provincial or territorial brackets; supported basic, age, pension, spouse, employment, and payroll credits
  • Employee CPP/QPP, EI, and QPIP contributions, including enhanced-plan income deductions
  • CPP timing factors from age 60–70; user-entered QPP timing for Quebec
  • OAS residence qualification, deferral, age-75 increase, recovery tax, and the related income deduction
  • Official October–December 2026 GIS formulas, household categories, and the employment-income exemption
  • RRSP deductions and room, household TFSA room, RRIF January 1 minimums, and the elected spouse-age basis
  • Separate cash, TFSA, and non-registered withdrawals with a dollar adjusted-cost-base ledger
  • Spending and donations take priority over new savings; account withdrawals fill remaining gaps before and after retirement
  • Pension-income splitting in 5% steps and pension-credit treatment from age 65
  • Total plan value: funded retirement spending plus estimated ending after-tax assets; reinvested surplus stays in ending assets
  • Estimated terminal income tax calculated with 2026 tax rules on remaining RRSP/RRIF balances and unrealized non-registered gains, in addition to the final modeled year’s ordinary income; deducted once when valuing ending assets

Material limits and assumptions

  • This is an annual real-dollar projection, not a complete tax return or a monthly entitlement calculation
  • Estate valuation assumes both spouses die together at the plan’s end and leave the estate to independent adult heirs: no spousal rollover, 50/50 ownership of remaining non-registered investments, and no tax on TFSA value or cash at death. Probate, estate administration, post-death income and special final-return elections are excluded
  • Allowance, Allowance for the Survivor, CPP post-retirement benefits, and CPP pension sharing are omitted. First-year OAS/GIS assumes a June birthday (payments from July); CPP and later age-related rate changes remain annual estimates
  • Exact spousal-RRSP attribution, locked-in account rules, and owner-specific partner RRSP contribution room are outside the model
  • Dividends, investment interest, fund distributions, foreign tax, and inter-year capital-loss use are not calculated
  • Many refundable, dependent, disability, medical, and provincial low-income credits require facts the planner does not collect; donations use the entered percentage of income
  • GIS July–June periods use January–June income from two years earlier and July–December income from the prior year; income before the projection is assumed equal to the first projected year. A Service Canada retirement-income estimate is not modeled
  • The yearly withdrawal search keeps a validated best-found plan under a shared time budget; it does not prove a global optimum.
  • The planner assumes Canadian citizenship and residence at OAS start; immigration, treaty, sponsorship, or existing partial-OAS cases require official review
  • Returns are smooth real-dollar assumptions, not a Monte Carlo forecast

Official rule references

RRIF income and deemed balances on a final return Capital property deemed disposed of at death Tax treatment of TFSA value at death OAS eligibility and residence When to start OAS CPP timing adjustments OAS recovery tax Line 23500 social-benefits repayment deduction 2026 income tax brackets CRA 2026 tax and payroll formulas 2026 federal and provincial TD1 credit forms Line 34900 donations and gifts credit Manitoba personal income-tax rates Quebec income-tax rates Quebec 2026 tax and contribution changes Quebec 2026 individual Health Services Fund parameters Quebec basic amount includes QPP, EI and QPIP contributions Quebec Schedule B retirement-income eligibility and 1.25 multiplier Capital gains and adjusted cost base 2026 CPP contribution rates and limits 2026 EI premium rates and maximums 2026 QPP contribution rates and limits 2026 QPIP employee premium 2026 RRSP and TFSA dollar limits How CRA calculates RRSP deduction room Last year for contributions to an own RRSP TFSA annual room and withdrawal restoration RRIF prescribed factors Pension income splitting T1032 recipient pension-credit eligibility GIS in net income and the taxable-income deduction Spouse credits use net income RRSP withdrawal tax and withholding Spousal-RRSP attribution Official OAS/GIS estimator Official 2026 GIS amounts and cutoffs Official GIS income-band tables GIS eligibility and income rules Retirement income-estimate form (ISP-3041)
Educational estimate only.

Not financial, tax, legal, or immigration advice. Rules and amounts change. Verify CPP/QPP, OAS, GIS, residence, sponsorship, treaty, foreign-income, and pension situations with the responsible agency and a qualified professional. Rules reviewed October 24, 2026.

Using 2026 Canadian rules · Last reviewed October 24, 2026