How Long Will My Money Last? A Better Way to Ask

Most retirement calculators make one mistake. They treat retirement as a single decision — one number in, one number out. It isn't. Retirement is hundreds of small decisions, and how long your money lasts depends less on the size of the pile than on the order you make them in.

TL;DR: "Savings ÷ spending" and the 4% rule both ignore the things that actually decide the answer in Canada: which account each dollar comes from, when CPP and OAS start, what RRIF minimums force, and what markets do in your first decade. A year-by-year simulation replaces the guess with a specific year — and shows which decisions move it.

Why the simple math misleads

Divide $800,000 by $50,000 a year and you get sixteen years. Almost nothing about that number survives contact with reality:

• Taxes depend on the account. A dollar from a TFSA funds a dollar of spending; a dollar from an RRIF funds seventy-some cents, depending on your bracket and province. Two households with identical savings but different account mixes can have very different answers.
• Benefits arrive on their own schedule. CPP (whenever you start it between 60 and 70) and OAS (65 or later) reduce what the portfolio must carry — but not in the early years of an early retirement, which is often when the portfolio is most exposed.
• RRIF minimums force income. From your early seventies, mandatory withdrawals rise with age whether you need the money or not, dragging taxes and sometimes OAS clawback with them.
• Markets don't average. Two retirees with the same average return can end in completely different places depending on which years were bad — the sequence-of-returns problem. A single assumed return hides this entirely.

The 4% rule — withdraw 4% of your savings the first year, then adjust for inflation — at least acknowledges uncertainty. But it was built on US market history and US accounts, with no CPP, OAS, GIS, or RRIF rules. As a Canadian answer it's a rough first check, not a plan.

The better question

"How long will my money last?" has a more useful form: "In what year does my plan first fall short — and what moves that year?"

That version has a real answer. A year-by-year simulation runs your actual accounts through Canadian tax and benefit rules and reports the last fully funded age — the age your money actually reaches with your spending fully covered. Then the interesting part starts, because each lever can be tested one at a time:

• Withdrawal order — the same savings can last visibly longer under one draw order than another; comparing strategies side by side is usually the cheapest improvement available.
• CPP and OAS timing — fifteen start-age combinations, each shifting how much the portfolio carries and when.
• Spending shape — a plan that spends more in the active early years and less in the quieter later ones behaves differently from one flat number, and usually more realistically.
• The stress test — a Monte Carlo simulation (hundreds of re-runs of your plan, each with different market luck) turns "sixteen years, probably" into "holds to 95 in most scenarios, falls short by 88 in the bad ones."

The number you end up with is yours — not an average, not a rule of thumb, and honest about what could bend it.