FIRECA
Canadian Retirement Planner
What percentage of your portfolio can you safely withdraw each year without running out of money? The answer depends on your retirement length, flexibility, and government benefits.
Your withdrawal rate is the percentage of your portfolio you spend in the first year of retirement, adjusted for inflation each year after. It's the key variable that determines how large a portfolio you need to retire.
| Retire at | Horizon (to 90) | Suggested Rate | Historical Success Rate |
|---|---|---|---|
| 65 | 25 years | 4.0–4.5% | ~95%+ |
| 60 | 30 years | 4.0% | ~95% |
| 55 | 35 years | 3.5% | ~92% |
| 50 | 40 years | 3.25–3.5% | ~90% |
| 45 | 45 years | 3.0–3.25% | ~88% |
| 40 | 50 years | 3.0% | ~85% |
These are general guidelines. Historical success rates are based on globally diversified portfolios and do not include CPP/OAS income offsets — which would push actual success rates higher for Canadians.
CPP and OAS are inflation-indexed, lifelong income streams that act as a floor under your retirement income. They reduce how much of your portfolio you actually need to draw each year — especially in the later phases of retirement when they're fully active.
Withdraw a set dollar amount each year (inflation-adjusted). Simple, predictable, but doesn't respond to market conditions. Higher failure risk in bad sequences.
Withdraw a fixed % of current portfolio value each year. Never fully depletes the portfolio, but income fluctuates. Works well with flexibility.
Set an upper and lower spending limit. If portfolio drops 20%, cut spending 10%. If portfolio rises 20%, increase spending 10%. Very robust.
Keep 1–2 years expenses in cash, 3–7 years in bonds, rest in equities. Never sell stocks in a downturn — replenish from bonds and cash instead.
Research consistently shows that flexible withdrawal strategies survive longer and with larger final portfolios than fixed withdrawal rates — at the cost of income uncertainty.
The biggest threat to a retirement plan isn't average returns — it's the sequence of returns. Getting bad returns early in retirement, while withdrawing, permanently impairs the portfolio in a way that later good returns can't fully fix.
This is why FireCA's Monte Carlo simulation and historical crash testing matter — they model this risk explicitly, not just average outcomes.
FireCA's retirement runway simulator automatically calculates the highest withdrawal rate that survives your full retirement horizon — no guessing required.