A first-year percentage describes the starting withdrawal.
Divide the first year's planned portfolio withdrawal by the savings available at the start of retirement. That arithmetic describes the initial job assigned to the portfolio; it does not establish how long the money will last.
References such as 3.5%, 4.0% and 4.5% can help compare the size of that job. They are not Retired Kevin recommendations or promises. The same starting percentage can lead to different outcomes when the time horizon, investments, fees, inflation or spending path differs.
Eight parts can change the answer
Planning horizon
A longer period assigns more years of spending and uncertainty to the portfolio.
Other income
CPP, OAS, pensions, annuities and work income reduce the gap savings need to fill when they arrive.
Investment path
Weak results early in retirement can matter more when withdrawals remove money before a recovery.
Fees
Costs reduce the return that remains available to support withdrawals.
Inflation
Increasing withdrawals to maintain purchasing power creates a different path from keeping the dollar amount level.
Tax
The gross amount withdrawn may not equal the cash available to spend.
Spending flexibility
A plan that can adjust some spending has different choices from one with little room to change.
Reserves and later goals
Large one-time costs, later-life support or estate intentions can change how much capital the plan keeps available.
Three policy shapes
The rule for changing withdrawals matters too.
Level dollars
The same dollar amount is withdrawn until the plan is reviewed. Purchasing power may fall as prices rise.
Inflation-adjusted
The amount rises with a stated assumption or measure. The portfolio is asked to support increasing dollars.
Flexible
Some spending may pause or change after weak markets or a life change. Essential and flexible costs need to stay distinct.
A simplified example
The portfolio can have a smaller job after income begins.
A fictional retiree needs portfolio withdrawals for the years before a workplace pension begins. Once the pension starts, the monthly gap falls. Treating the first temporary withdrawal as a permanent percentage would miss that change.
The example holds spending and all other assumptions constant. It illustrates why an income timeline matters; it does not determine a sustainable amount.
Illustrative only. The names and circumstances are fictional.Related questions
A few useful follow-ups.
Is 4% always safe?
No percentage guarantees an outcome. Horizon, market sequence, fees, inflation, taxes, income and flexibility all matter.
Does a RRIF minimum show how much I can safely spend?
No. A RRIF minimum is a tax-rule withdrawal requirement. It is not a spending recommendation or sustainability test.
Do withdrawals have to rise with inflation?
That is a planning choice, not an automatic rule. The spending goal, income sources and portfolio all need to be compared on the same dollar basis.
Explore it in your plan
Compare a withdrawal approach in the Income Planner.
Use the existing modelled paths to compare the portfolio's job beside pensions, benefits and spending. The article does not run a separate forecast.
Official sources
These sources were reviewed August 17, 2026. Program rules and tax treatment can change; confirm the information that applies when acting.
- Canada.ca: Financial planning for older Canadians (opens in a new tab)
- Canada.ca: Sources of income during retirement (opens in a new tab)
- FP Canada: Projection Assumption Guidelines (opens in a new tab) — dated planning-assumption context, not a withdrawal-rate recommendation.
Retired Kevin is not affiliated with or endorsed by these organizations.