The ten years that decide
your retirement tax bill.

Two households can retire on the same day with the same money, spend exactly the same amount every year, live exactly as long, and one of them leaves their children hundreds of thousands of dollars less.

The difference is what they did in their sixties.

The window

There is a stretch of your financial life that opens the day the paycheque stops and closes in the year you turn 72. Call it 60 to 70, give or take. It is the only period where you have both low income and full control over what your income is.

Before it, your income is largely whatever the job pays. If you're incorporated you have more control than most. After it, RRIF minimums take over and a percentage comes out whether you want it or not, climbing every year.

The window, and when it shuts

That is roughly ten years where you decide what your income is. Nothing else in a financial life gives you that.

And almost nobody uses them. The instinct is to leave the RRSP alone as long as possible, spending non-registered savings instead. It feels prudent. It is the single most expensive default in Canadian retirement planning.

Why leaving it alone costs so much

Retire at 63, live off non-registered savings, and your taxable income through your sixties might be $15,000. You pay almost no tax, which feels like winning.

But the low bracket doesn't roll over. Every year you leave it unused, it's gone permanently, and the RRSP you protected keeps compounding into a withdrawal you'll be forced to take later at a higher rate.

Where cheap income stops being cheap

Think of the lowest bracket as a container that refills every January and empties every December. Whatever you don't put in it that year, you don't get back. The container is the same size next year, but the year you skipped is gone.

Then the choice is taken away

By December 31 of the year you turn 71, your RRSP has to become a RRIF or an annuity. No withdrawal is required in that first year. Starting in the year you turn 72, the minimum begins at 5.28% of the January 1 balance and climbs from there.

The minimum you must withdraw, by age

Stacked on CPP, OAS and any pension, that routinely puts people in a higher bracket at 78 than they were at 62. And whatever is still sitting in the RRIF at the end is generally brought into income all at once on the final return, where it can be taxed at rates up to 53.5% in British Columbia.

Dollars that could have come out at roughly 20% during the quiet years instead leave at more than half.

What using the window looks like

Here are two financial plans for the same sample household, run through the planning software I use. Same people, same spending, same assumptions. The only difference is which accounts they draw from.

The first financial plan redeems the low-tax investments first, which is the intuitive order and the one most people follow by default. The second spends non-registered money early and draws the registered accounts down through the gap years, moving surplus into the TFSA.

What the software reports is estate shrinkage: the share of the estate lost to tax and probate before anything reaches the beneficiaries.

Estate shrinkage, same household, two withdrawal orders

Both financial plans start in roughly the same place, losing a little under a quarter of the estate. Then they separate.

Under the first financial plan, the registered accounts stay large. By 2053 there is still $683,000 sitting in them, waiting to be brought into income all at once on a final return. Total estate costs come to $368,159.

Under the second, that money has been drawn down and moved along the way. By 2053 there is almost nothing left in a registered account to be taxed, and total estate costs fall to about $36,700, most of it probate rather than tax.

A difference of roughly $771,000, and none of it came from better returns. It came from the order of withdrawal.

Whether it works for a given household depends on the size of the RRSP, how many gap years there are, and what other income is already committed. For a couple with modest registered savings, leaving the RRSP alone is often fine as written.

Three questions to answer this year

What will your taxable income be at 72 if you change nothing? Most people have never calculated it, and the number is usually higher than they expect. That single figure tells you whether you have an opportunity here at all.

How many planning years do you have before 72? Retiring at 60 gives you twelve. Retiring at 68 gives you four. The strategy scales with the window.

What is your TFSA doing? If it's small, the gap years are also the years to fill it. TFSA income is the only income that never counts toward the OAS clawback and never lands on the final return.

Four other things move this decision, and each is worth its own conversation: where the OAS clawback sits, when you start CPP and OAS, which non-registered account you draw from, and what happens if the corporation is still open. I'll cover each of them in the coming weeks.

Sources: Conquest Planning, multi-year estate projection, sample household, August 2026; Income Tax Regulations section 7308, prescribed RRIF factors; Government of British Columbia, Personal Income Tax Rates, 2026 Budget; Canada Revenue Agency, Old Age Security pension recovery tax thresholds (accessed August 2026).