Reference

Retirement Terms, in Plain Language

Use familiar words first, then connect them to the technical terms you may see elsewhere.

By Retired Kevin Reviewed August 19, 2026 10 min reference

Planning and forecasts

These terms explain what the planning illustrations show—and what they cannot promise.

Quick Snapshot: A rough first retirement estimate built from a small set of inputs. It is a starting point for questions, not a prediction.
Working plan: The version currently driving the planner. It may be open on this device without having been saved under a name.
Saved plan: A named device-local snapshot you explicitly kept. It is not an online account or cross-device backup.
Temporary test: A change being explored. It does not replace the working plan unless you explicitly use that version.
Smooth illustration: A calculation that applies one steady assumed return each year. Actual returns do not arrive smoothly.
Range of outcomes: A set of results produced from changing modelled market sequences. The range describes the model, not every possible future.
Modelled market sequence: One generated order of stronger and weaker investment returns. It may also be called a modelled path.
Middle modelled result: The result with half of the modelled outcomes above it and half below it. The technical term is median.
Wider modelled range: A lower-to-upper span used to show how modelled outcomes varied. Retired Kevin commonly shows the 10th to 90th percentile.
Percentile: A position within the ordered modelled results. It is not a promised result or a personal probability.
Today’s dollars: Amounts adjusted so their buying power can be compared with money today. Read about inflation and today's dollars.
Future dollars: The dollar amount in a future year before translating it into today’s buying power.
Inflation: A broad rise in prices that reduces what the same dollar amount can buy over time.
Plan through age: The age through which an illustration continues. The technical term is planning horizon; it is not a lifespan prediction.
Extra caution: A deliberate reduction to the assumed investment return to leave more room for results to differ. The technical term is planning margin.

Income and government benefits

These terms separate public benefits, workplace plans and the income available for spending.

Canada Pension Plan (CPP): A monthly taxable retirement benefit based mainly on work earnings and contributions to CPP. Quebec has the similar Quebec Pension Plan.
Old Age Security (OAS): A monthly pension for eligible people age 65 or older, based mainly on age, legal status and residence history rather than work contributions.
Guaranteed Income Supplement (GIS): A monthly tax-free payment for eligible lower-income OAS recipients. Income and household circumstances affect eligibility and payment amounts.
Workplace pension: A retirement plan connected to an employer. Its plan documents explain how benefits or account balances are built and paid.
Defined-benefit pension: A workplace pension that calculates a promised pension using the plan’s formula, often based on earnings and service.
Defined-contribution pension: A workplace plan where contributions build an invested account. Retirement income depends on the account value and how it is used.
Retirement income: Money received in retirement from sources such as public benefits, workplace pensions, work, annuities and savings withdrawals.
Income before tax: Income measured before income tax and other deductions. It is not necessarily the amount available to spend.
Spendable income: The cash remaining for spending after relevant deductions and tax. An estimate may differ from the final tax result.

Accounts and tax

Account rules affect when tax may arise. The investment held inside the account is a separate choice.

Account: The legal and tax container that holds cash or investments. An account is different from the investment inside it and the provider that administers it.
Tax-Free Savings Account (TFSA): A registered account where contributions are not deductible, but investment income and normal withdrawals are generally tax-free under current rules.
Registered Retirement Savings Plan (RRSP): A registered retirement account where deductible contributions may reduce taxable income, growth is generally tax-deferred while funds remain inside, and withdrawals are generally taxable.
Registered Retirement Income Fund (RRIF): A registered account used to pay retirement income from transferred registered savings. Annual minimum withdrawals apply, and amounts received are generally taxable.
Non-registered account: An account without the TFSA or RRSP tax rules. Interest, dividends and realized capital gains may receive different tax treatment.
Contribution deduction: An amount that may reduce taxable income when claimed under the applicable rules. An RRSP contribution may be deductible; a TFSA contribution is not.
Tax-deferred growth: Investment income that is generally not taxed while it remains in a registered plan, with tax usually arising later when money is received.
Taxable income: Income included in the tax calculation under current rules. Taxable income is not the same as gross cash received or final tax payable.
Tax withheld: Money sent to the Canada Revenue Agency in advance when a payment is made. It is not necessarily the final tax owed.
Final tax owing or refund: The result after the full tax return brings together income, deductions, credits, amounts withheld and federal and provincial or territorial rules.

Investing and uncertainty

These terms describe the portfolio’s job, its assumptions and the ways results can vary.

Investment: An asset held with the aim of preserving value, producing income or growing over time. Its value and income may change.
Portfolio: The collection of investments considered together. The mix, costs and risks belong to the portfolio rather than to an account label alone.
Provider: The bank, credit union, insurer, brokerage or other institution that administers an account or offers a product. It is not the account or investment itself.
Investment mix: How a portfolio is divided among investments with different growth, stability and near-term-cash roles.
Stock or equity: An ownership interest in a company. Stocks can support long-term growth, but their prices may rise or fall substantially.
Bond or fixed income: A debt investment that usually pays interest and returns principal under stated terms. Its market value can still change.
Cash or near-term cash: Money or short-term holdings kept for access and stability. They usually have less market fluctuation but may have less long-term growth.
Diversification: Spreading a portfolio across different investments, issuers, markets or asset roles so one holding does not determine the whole result.
Expected return: A planning assumption for the investment return that might be earned over time. It is not a required or guaranteed return.
Estimated fund cost: An assumed or reported cost deducted from investment returns. Actual costs depend on the investments and services used.
Expected ups and downs: An estimate of how widely returns may vary around their average. The technical term is volatility.
Sequence risk: The risk that weak returns early in retirement cause more damage because withdrawals remove money before a later recovery.
Fall from an earlier high: The decline from a previous portfolio peak to a later low point. The technical term is drawdown.

Official sources

Definitions are intentionally brief. Confirm current program eligibility, account rules and tax treatment before acting.

These sources were reviewed August 19, 2026. Program rules and tax treatment can change; confirm the information that applies when acting.

Retired Kevin is not affiliated with or endorsed by these organizations.

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