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Waiting for RRIF minimums to fund your retirement? On $700K, it leaves $316K for the taxman

We ran the same Ontario retiree through three RRSP drawdown strategies to age 90. The 'just take the minimums' path is the only one that doesn't fund the lifestyle — and it leaves the biggest tax bill behind.

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A common plan: spend the TFSA and savings first, leave the RRSP alone, and let the RRIF minimums sort it out later. It feels tax-smart, because you're deferring. But deferral isn't free — it just moves the bill. Here's what it looks like in numbers.

The test case

One retiree, age 65, Ontario, planning to age 90:

  • $700,000 in an RRSP, $100,000 in a TFSA, $100,000 non-registered
  • $12,000 a year of CPP and $9,000 of OAS
  • A target of $60,000 a year of after-tax spending, in today's dollars
  • A 3% real (after-inflation) return

We ran it through the Metrestick drawdown simulator three ways.

What the three strategies did

  • Minimums only (RRSP untouched until forced). The TFSA and savings are gone by about age 70, the plan stops fully funding the $60,000 target, and spending slips to roughly $54,000–$55,000 once RRIF minimums are the only income. The RRSP is still worth about $316,000 at 90 — all of it taxable income for the estate. Lifetime tax looks lowest (about $193,000), but only because far less was spent.
  • RRSP first, steadily. Drawing about $51,000 a year from the RRSP from day one funds the full $60,000 target through age 90, with about $30,000 left over. Lifetime tax: about $212,000.
  • Bracket-fill. Drawing enough each year to sit right at the OAS clawback threshold (about $95,323 of income) funds the target to 89 but runs short in the final year. Lifetime tax: about $219,000.

None of the three triggered an OAS clawback in this case.

The lowest tax number isn't the best plan. "Minimums only" looks cheap because it quietly cuts the lifestyle and strands a large taxable balance.

Why steady beats deferred

RRSP withdrawals are taxed as income at your marginal rate. Taking $50,000–$75,000 a year through your 60s and 70s keeps you in the lower brackets. Waiting concentrates the same dollars into larger forced withdrawals later — and, at death, into a single final return where the whole balance is added to income.

It also helps the TFSA do its job. In the steady-draw runs, the TFSA and non-registered money keep growing for another decade or more, and are spent last — when tax-free dollars are most valuable.

When the clawback does matter

This retiree never reached it, but a bigger RRSP, a workplace pension, or a spouse's income can. The OAS clawback starts at $95,323 of net income for 2026, at 15 cents per extra dollar. If you're near that line, the bracket-fill approach — or income splitting — is worth a closer look.

What to do with this

  1. Add up your RRSP/RRIF, TFSA and non-registered balances.
  2. Decide the after-tax income you actually want.
  3. Compare strategies for your numbers, not ours — the RRSP meltdown calculator runs all three, and the OAS clawback calculator shows how close you are to the threshold.

Results swing with returns, spending, province and spouse income, so treat this one case as an illustration, not a prescription.

Drawdown results via Metrestick. Underlying data: CRA 2026 tax parameters with OAS/GIS/CPP figures (Open Government Licence – Canada), 2026.

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