RRSP Savings Calculator
Frequently Asked Questions About The Calculator
Q: What does the calculator do?
A: This calculator will help you plan how much you need to save in order to get the type of retirement income you want. You can find out how high your RRSP savings will grow if you earn a specific investment return and contribute a specific amount each year. The calculator will also show how much annual income that total RRSP savings would produce if you used it to purchase a life annuity at retirement (ignoring fees, individual health etc.). The life annuity is based on the same interest rate as the one you enter as a rate of return for your investments.
You should note that income generated from RRSP savings through an annuity or RRIF is only one source of retirement income. You might also earn income from a pension, or government plan such as CPP or OAS.
For example: Michael's RRSP savings of $150,000 could generate $9,600 a year in income. But, he also expects $22,000 a year from his workplace pension, and expects to receive as much as $10,000 from government plans. His total annual income, post-retirement: $41,600 a year.
Q: What assumptions are included in the calculator?
A: The calculation is based on a life
annuity. The annuity has no guarantee period and is not indexed to
inflation. The life annuity is based on the same interest rate as the one you enter as a rate of return for your investments. The calculation also assumes the same investment return before and after retirement, and it ignores
taxes and fees. Furthermore, it assumes that annuity income will be withdrawn at the end of each year.
Q: Do the results consider the difference between an investment made early in the year and one made later in the year?
A: The calculator assumes the annual RRSP investment is made at the start of the taxation year.
Q: Who do I contact if I need help or have questions?
A: Contact us if you have any questions or comments. Please tell us what you think of this calculator.