The 4% Rule in Canada: RRIF Minimums, CPP, OAS and the TFSA
For Canadian retirees, the 4% rule is a starting withdrawal rate: take 4% of your savings in the first year, raise it with inflation, and the money has historically lasted about 30 years. In Canada it has to fit around CPP and OAS, which reduce how much you need, and around RRIF minimums, which from age 71 force you to withdraw more than 4%.
The rule comes from US research (the Trinity Study and William Bengen's work): 4% of the starting portfolio, adjusted for inflation each year, survived nearly every 30-year period in the historical record. The shortcut is to multiply annual spending by 25 — $60,000 a year implies $1.5 million. For a Canadian, only the spending that CPP and OAS do NOT cover needs to come from the portfolio.
CPP and OAS take a real bite out of that number. The average new CPP retirement pension at 65 is $877.01 a month (2026) and the maximum OAS pension for ages 65–74 is $762.50 a month (October–December 2026; OAS is indexed every quarter) — together about $19,700 a year. Every $10,000 of annual spending those pensions cover cuts the portfolio you need by $250,000 under the 25x rule. Early retirees must fund the gap alone: CPP can start at 60 at the earliest and OAS at 65.
RRIF minimums are where the 4% rule meets Canadian law. An RRSP must be converted to a RRIF (or annuity) by the end of the year you turn 71, and a RRIF has a legal minimum withdrawal each year under Income Tax Regulations s.7308. Before 71 the minimum is 1 ÷ (90 − age), which is exactly 4% at 65; at 71 it is 5.28%, rising to 6.82% at 80 and 20% from 95. From 71 onward you cannot hold RRIF withdrawals to 4% — anything you do not spend has to be reinvested, ideally in a TFSA.
Tax decides the order. RRIF and RRSP withdrawals are taxable income and count toward the OAS recovery tax, which claws back 15% of OAS for each dollar of net income above $95,323 (2026 income year). TFSA withdrawals are tax-free and do not count. That makes the withdrawal ORDER part of a Canadian safe-withdrawal plan: drawing some RRSP money in the lower-income years before CPP, OAS and RRIF minimums start can lower lifetime tax, while the TFSA is the flexible buffer that keeps net income under the clawback line later.
Someone retiring well before 65 needs the money to last longer than the 30 years the rule was tested on, so a 3–3.5% starting rate is the common adjustment. Flexible spending — cutting withdrawals after a bad market year — improves the odds more than any fixed percentage. Treat 4% as the first estimate for a Canadian plan, then check it against your own CPP, OAS and RRIF timeline.
Richify's AI agents model your Canadian withdrawal plan year by year — CPP and OAS start dates, RRIF minimums, TFSA drawdowns and the OAS clawback — so you can see what 4% really means for you.
