Retirement Withdrawal Strategy: Secure a Lifetime Paycheque

November 26, 2025

Many Canadians believe a simple calculation can tell them if their savings will last through retirement. However, a solid retirement withdrawal strategy goes beyond back-of-the-napkin math. For example, if you plan to withdraw $10,000 per month from a $1.6 million portfolio, careful planning is crucial. A proper strategy ensures your money lasts. In addition, it helps you avoid unexpected shortfalls and gives you confidence in your retirement income.

Why Simple Math Often Fails Without a Retirement Withdrawal Strategy

Inflation reduces spending power

If you take out $10,000 per month today, inflation will slowly increase that need. So, if you do not adjust withdrawals each year, your money may not cover your lifestyle.

Markets are unpredictable

Assuming your portfolio grows 5% every year is risky. In fact, a market drop can shorten your savings much faster. Also, taking money out during a down year makes it worse.

Taxes impact withdrawals

Your withdrawal plan must think about account types. For example, $120,000 from an RRSP is different from the same amount from a TFSA. Without planning for taxes, you might need to withdraw more. This puts extra strain on your savings.

Case Study: Rick’s Retirement Withdrawal Strategy

Rick is 57 and wants to retire immediately with $1.6 million. He hopes to spend $10,000 per month. His savings include:

$1,000,000 in RRSPs
$200,000 in a TFSA
$400,000 in a non-registered account

Rick plans to take CPP and OAS as early as possible and stay in his $800,000 debt-free home.

Initial Analysis:

If Rick withdraws $120,000 per year without adjusting for inflation, taxes, or market risk, his savings deplete well before age 90.
Early CPP and OAS help but don’t fully solve the problem.
Even small part-time work or modest portfolio growth only partially improves sustainability.

This shows why a proper retirement withdrawal strategy is essential for long-term financial security.

Key Elements of a Sustainable Withdrawal Strategy

1. Delay government benefits when possible

Deferring CPP or OAS increases lifetime income. As a result, this raises the income “floor” and reduces pressure on other savings.

2. Adjust withdrawals over time

For example, consider higher withdrawals early in retirement when you’re most active. Then, reduce spending later. This balances lifestyle needs and portfolio longevity.

3. Use tax-efficient accounts strategically

Withdraw from accounts in a way that minimizes taxes. For example, draw from your TFSA before taxable accounts, and consider moving funds between accounts for efficiency.

4. Leverage home equity if needed

Options like a reverse mortgage or selling a home later in retirement can supplement income without draining investments too early.

5. Plan for realistic returns

Assume conservative market growth and include a buffer for negative years. Avoid overly optimistic projections.

6. Include flexible income

Part-time work or freelance income can reduce withdrawals and improve the sustainability of your portfolio.

Applying the Strategy: Rick’s Updated Plan

Delay CPP/OAS: Rick defers benefits to increase guaranteed income later.

Part-time work: Earning $35,000 per year until 65 adds extra buffer.

Home equity: Only accessed via a reverse mortgage if necessary.

Adjusted spending: $10,000/month until age 75, then $6,500/month afterward.

With this approach, Rick’s portfolio is projected to last until age 90, securing a lifetime paycheque without forcing him to sell his home prematurely.

Final Thoughts

A clear retirement withdrawal strategy transforms savings into stable, lifelong income. Without planning for inflation, taxes, market volatility, and changing expenses, even $1.6 million can fall short. By delaying benefits, adjusting withdrawals, using tax-efficient accounts, and considering flexible income sources, you can secure a sustainable retirement paycheque.

Take control of your retirement today and ensure your income lasts. Check out the Atlas system to see the exact process we use to keep retirement plans on track.

For more detailed guidance, visit the Trans Canada Wealth Management YouTube channel for additional retirement planning tips or click here to book a free consultation with our team.