What is Retirement Decumulation?

Example

At age 65, you have $500,000 in an RRSP, $200,000 in a TFSA, and a $100,000 non-registered account. A decumulation strategy might be:

1. Ages 60-65: Withdraw from RRSP (before OAS) to reduce future income
2. Ages 65-72: Combine CPP/QPP + OAS + RRSP/RRIF withdrawals
3. Age 72+: Mandatory minimum RRIF withdrawals + TFSA as a buffer

The 4% rule suggests you can withdraw about 4% of your portfolio in the first year, then adjust for inflation.

Why It Matters

The decumulation phase is often more complex than accumulation. You must coordinate withdrawals across RRSP/RRIF, TFSA, and non-registered accounts to minimize total tax, avoid OAS clawback, and make money last. Starting to plan 5-10 years before retirement is ideal.