The Truth About Retiring With $3 Million in Canada

October 31, 2025

What does retiring with $3 million in Canada really look like? On paper, it sounds like more than enough to enjoy a comfortable lifestyle. However, after working with Canadians who have $2–5 million saved, the reality is often different. Some retirees overspend and risk running out of money, while others underspend and never fully enjoy their retirement. Taxes, inflation, and government benefits like CPP and OAS can significantly affect your disposable income. Understanding how $3 million translates into actual retirement income is critical for planning a secure and enjoyable future.

How Retiring With $3 Million in Canada Translates Into Income

Consider Sarah, a 55-year-old retiree with $3 million in savings. Her portfolio includes $400,000 in a TFSA, $600,000 in a non-registered account, and $2 million in an RRSP. She owns a home worth $500,000 with no mortgage. Initially, her retirement plan targeted a high-spending phase from age 55 to 65, averaging nearly $11,000 per month for travel and lifestyle. From 65 to 80, her expenses drop to $8,500 monthly, and from 80 to 90, to $6,000.

Sarah’s withdrawal strategy prioritized non-registered accounts first, followed by RRSPs and TFSAs. This approach ensured she was in no danger of running out of money. Her plan was fully funded at 136%, leaving room for additional spending or an even larger estate.

Tax-Efficient Strategies for Retiring With $3 Million in Canada

When it comes to retiring with $3 million in Canada, the real difference often comes down to how you withdraw your money. The order in which you draw from your RRSP, TFSA, and non-registered accounts can drastically affect how long your portfolio lasts—and how much tax you pay along the way.

In Sarah’s case, her adviser’s original plan wasn’t wrong. It gave her steady income and kept her assets growing. However, a few smart adjustments allowed her to increase her estate by more than a million dollars—without changing her investment returns.

1. Delay CPP for Higher Guaranteed Income

By deferring her Canada Pension Plan (CPP) until age 70, Sarah’s annual cash flow improved by 3%, and her total estate value rose by nearly $188,000. Delaying CPP also helped lower her taxable income in her early retirement years, allowing her to qualify for the Guaranteed Income Supplement (GIS)—a benefit many high-net-worth retirees overlook.

2. Control Withdrawals to Manage Tax Brackets

For the first 10 years of retirement, Sarah targeted a taxable income of roughly $177,000 per year. This kept her within the 40% combined BC and federal tax bracket. By doing this, she avoided unnecessary taxes while maintaining a comfortable lifestyle.

3. Use the TFSA Strategically

Once Sarah turned 65, she switched to drawing from her TFSA and small amounts of non-registered money. This move kept her income low enough to qualify for the GIS, adding around $10,000 of tax-free income per year until age 70.

4. Reassess Withdrawals After Age 70

When CPP started at 70, her income rose and she no longer qualified for GIS. At that point, Sarah went back to withdrawing from her registered accounts. She also topped up her TFSA each year with extra non-registered funds, ensuring more of her future income would remain tax-free.

Through these small but powerful changes, Sarah’s plan went from “good” to “optimized.” Her retirement cash flow increased to 150% of her spending needs, and her projected estate grew from $4 million to $5 million.

Managing $3 Million in Retirement: The Key Takeaway

Sarah’s original plan wasn’t “wrong” — it gave her reliable cash flow and a sizable estate. But with a few thoughtful adjustments, she was able to:

Increase her projected estate by over $1 million.
Optimize her tax efficiency without touching investment returns.
Boost her retirement cash flow to comfortably exceed her expenses.

This shows that real planning goes beyond investment performance. Smart withdrawals, timing government benefits, and strategic TFSA use can keep more money in your pocket and give you the freedom to enjoy retirement exactly how you want.

Why $3 Million Is Just a Number

The main lesson from Sarah’s story is that $3 million doesn’t automatically equal a perfect retirement. The number itself is only part of the picture. How you manage it, through tax planning, withdrawal strategies, and government benefits, ultimately determines your lifestyle and the legacy you leave behind.

Next Steps for Your Retirement Planning

If you want to see how different withdrawal strategies could work for your personal situation, explore the Atlas System. This 5 step system is something we walk every client through to bring together goals, income, investments, taxes and estate planning. It ensures withdrawals are optimized and that retirement goals remain realistic and achievable.

With careful planning, your $3 million can provide the lifestyle and legacy you envision.

For more detailed guidance, watch the full video on YouTube and visit the Trans Canada Wealth Management YouTube channel for additional retirement planning tips.