Updated Checked by the Tax-Services.ca editorial team How we check
To retire at 65 on $60,000 a year after tax, a 40-year-old in Ontario needs about $940,913 saved, in 2026 dollars. With $80,000 already put away, a 5.5% yearly return and 2.2% inflation, that works out to about $1,654 a month from now until retirement. The income runs from age 65 to 90, and average CPP and the full OAS pension are already counted.
The calculator starts from the income you want and works backwards to the savings that would pay it, taxes included.
How is the nest egg worked out from a yearly income goal?
The nest egg is the sum of every year’s withdrawal, each discounted back to the day you retire. Because your goal is after tax, the calculator first finds the pre-tax withdrawal that leaves it. In the example, CPP of $10,300 and OAS of $9,150 cover $19,450 of the year. Savings supply about $54,149 before tax, and $13,600 goes to income tax. Repeat that for every year to age 90, discounted at the return after inflation (about 3.2%), and the total is $940,913.
How much do CPP and OAS lower what I have to save?
CPP and OAS pay part of the goal for life, so they shrink the nest egg a lot. The Government of Canada’s CPP retirement pension amounts page lists a maximum of $1,507.65 a month at 65 in 2026 and an average of $858.34 at 65. Its Old Age Security payments page lists the full pension from October 2026 at $762.50 a month at 65 to 74 and $838.75 from 75, and getting it in full takes 40 years in Canada after age 18. OAS is repaid at 15% of net income above $95,323, as the OAS recovery tax page explains, and the calculator applies that to your withdrawals. Use your own CPP figure from My Service Canada Account instead of the average, and try the CPP calculator and OAS calculator for your own numbers.
What happens to the monthly saving if I retire earlier or later?
Retiring later cuts the monthly saving fast, because each year of delay adds a year of saving and removes a year of withdrawals. Here is the same goal and the same assumptions, with CPP and OAS still starting at 65:
| Retire at | Nest egg needed | Saving a month |
|---|---|---|
| 60 | $1,148,363 | $2,958 |
| 65 | $940,913 | $1,654 |
| 70 | $804,823 | $980 |
Which account should the monthly saving go into?
RRSP room is the usual first stop. The CRA’s page on how contributions affect your RRSP deduction limit sets room at 18% of last year’s earned income, up to the annual dollar limit, less any pension adjustment. Its table of RRSP and TFSA limits shows $33,810 for 2026 and $35,390 for 2027, plus TFSA room of $7,000 for 2026 and no 2027 TFSA limit yet. The deadline to count an RRSP contribution on your 2026 return is 1 March 2027. The calculator taxes every withdrawal, so a plan that leans on a TFSA needs less than shown. The RRSP calculator shows the tax saved by a contribution, and the TFSA calculator shows how tax-free growth adds up.
What does this estimate leave out?
The estimate uses the basic personal amount only, so the age amount, the pension income credit and pension income splitting would each lower the tax and the nest egg. It also assumes a steady return, withdrawals at the start of each year, and no home sale, GIS, spouse or one-off costs. Treat the result as a target and rerun it with a lower return and a later retirement age. The retirement calculator projects what your current savings could become, and the guide to the age amount, OAS clawback and pension splitting covers the credits left out here.
Where does this information come from?
CPP, OAS and recovery tax figures come from the Service Canada pages listed below (checked October 2026) and the RRSP limits from the CRA; the tax and nest egg figures are estimates from this site’s own tax engine. Checked in October 2026. This is an independent information site: we provide no services, we do not represent the CRA or any organization, and we do not guarantee that anything here is accurate or current. We accept no liability for decisions based on it. Check the official source before you rely on it. See the full disclaimer.
Frequently asked questions
How much do I need to save for $50,000 a year after tax?
A 30-year-old in British Columbia with no savings who wants $50,000 a year after tax from 65 to 90 needs about $678,535 in 2026 dollars. At a 5.5% return and 2.2% inflation that means about $873 a month, with average CPP and full OAS counted.
Is the monthly saving in 2026 dollars?
Yes. Everything is in 2026 dollars. For a 40-year-old in Ontario aiming at $60,000 a year after tax, the answer is about $1,654 a month today, and that amount should rise as your pay and prices rise. If your pay keeps pace with inflation, the share of income you save can stay about the same.
Should I use a lower return than 5.5%?
Run it at 4% as well as 5.5%. A lower return raises both the nest egg and the monthly saving, and the gap between the two runs shows how much your plan leans on market growth. Plan on the lower figure if a shortfall would hurt.
Does the retirement nest egg include my CPP and OAS?
No. CPP, OAS and any workplace pension come off the goal first, and the nest egg covers only what is left plus the tax on it. In the Ontario example on this page, CPP of $10,300 and OAS of $9,150 supply $19,450 a year, so savings only have to cover the rest.