Start with the retirement lifestyle you want, subtract reliable after-tax income sources, then test whether the remaining portfolio can fund the gap through a realistic planning horizon. Account type and taxes matter almost as much as the headline portfolio balance.
Start with spending, not savings
Estimate annual lifestyle spending in today’s dollars and separate it from irregular costs such as vehicles, renovations, travel, family support or major medical/dental expenses. Retirement spending often changes by stage, so one flat number can be misleading.
Estimate reliable retirement income
CPP, OAS, employer pensions and other recurring income reduce the amount the portfolio must fund. Their start ages matter: delaying CPP or OAS can increase future guaranteed income but requires additional funding in the delay years.
Translate the gap into a portfolio test
A simple screening ratio is portfolio divided by the first-year amount it must fund. For example, if a $1,000,000 portfolio must supply $40,000 in year one, that is 25 times the first-year portfolio-funded spending. If it must supply $60,000, it is about 16.7 times. Those ratios are only starting points because taxes, inflation, longevity and changing income all matter.
Do not ignore housing and taxes
A paid-off home can reduce ongoing housing costs and may provide future downsizing flexibility, while renting creates a different inflation-sensitive expense. Likewise, $1 million in TFSA assets is not equivalent to $1 million in RRSP assets because withdrawals have different tax consequences.
Build a household-specific answer
The planner combines retirement ages, spending phases, CPP/OAS, RRSP/RRIF, TFSA, taxable investments, home scenarios, taxes and market uncertainty. The result is more useful than a generic “you need 70% of salary” rule.
Calculate your retirement target
Use your actual household spending, benefits and assets to test whether the plan is sustainable.