The main improvement is that tax rates are calculated based on the tax bracket, rather than assuming a fixed tax rate applicable to all years. As RRSP balances and annual withdrawals increase, including annual gains from non-registered accounts, the applicable average tax rate gradually rises. This provides a more accurate basis for calculating investment strategy choices.
Other additions include the ability to fill in annual expenditure amounts, a mandatory adjustment to the RRSP/RRIF withdrawal ratio based on the minimum withdrawal requirement after age 71, and the option to choose whether the applicant is single or a married couple.
Setup Instructions:
SETUP Sheet
1. Choose whether it's for one person or a couple. This choice affects the tax rate for RRSP withdrawals.
2. RRSP balance defaults to 2M, the amount can be adjusted.
3. Non-registered account year-end balance is 300K, the amount can be adjusted.
4. Annual living expenses, default is zero, the amount can be adjusted, all subsequent years will be automatically calculated according to the inflation rate.
5. Annual inflation rate initially defaults to 2.5%, can be adjusted.
6. Non-registered account annual return defaults to 95% of the RRSP account return, can be adjusted.
7. In the non-registered account annual return amount, the proportion of Income (the other part is Capital Gain, taxed at a different rate) can be adjusted.
8. Current age (assuming both spouses are the same age), this is mainly used for calculating RRIF mandatory withdrawals starting at age 71.
FORECAST Sheet
1. Annual investment return rate. There are three options:
FixValue: You can enter the expected future annual return rate.
HistoryAve: Using the average annual return of the S&P 500 over the past 50 years
History20: You can choose any year from 1928-2005 as the starting point and use real 20 years of historical data for simulation. For example, if you choose 1995, the simulation will use the historical return data of the S&P 500 from 1995 to 2014.
2. The default annual withdrawal percentage for RRSP accounts is 5%, which can be adjusted.
Results and Explanations
RRSP A/C Balance Amount is the balance of the RRSP account at the end of each year.
Non-Register A/C Balance Amount is the balance of the non-registered RRSP account.
Effective Withdrawal Percentage is the annual withdrawal percentage from the RRSP account. Note that starting at age 71, the begger value of below two: 1:the minimum withdrawal percentage for RRIF and 2: the set withdrawal percentage, will be used.
Effective RRSP Withdrawal Tax The rate is the estimated average tax rate for RRSP withdrawals in the c year. This rate is based on the latest Canadian Federal and Ontario individual income tax brackets in 2026, taking into account the full realization of RRSP withdrawals and non-registered account earnings for the year. It also assume that annual tax bracket increases are in line with inflation.
RRSP Balance after inflation (adj.) and non-registered account Balance after inflation (adj.) are the present value of the annual balance of these two accounts discounted to the present value using the compound inflation rate.
The calculation covers up to 44 years; if the current age is 55, then the calculation extends to age 99.
Assuming there is still a balance in the RRSP at the end of 44 years, it is withdrawn all at once. Lump-Sum RRSP withdrawal after tax is the after-tax amount.
If either the RRSP or non-registered account has a negative value, it indicates a problem with retirement asset management, and a recalculation/reconsideration could be necessary.
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