Your after-tax income in retirement will depend on the strategy you choose in drawing income from various sources. It depends on where you live.
On average, a 65-year-old couple with $800,000 in an RRSP and $100,000 in a TFSA retiring in 2023 would have a total after-tax income of $115,600, including CPP, OAS, and GIS. (This is an amount expressed in constant dollars to reflect future inflation.)
However, as the chart shows, income tax rates and tax brackets vary across Canada, so the actual amount will vary by province and territory.
Geographically, the numbers generally get better as you go from east to west and from south to north. The numbers in the graph represent the optimized situation calculated by Mygoals Inc. (we would like to thank Raphi Zaionz and his Kosal Chhin for calculating the numbers). Optimization typically involves him starting his CPP at age 70 and drawing down her RRSP balance a little earlier before age 70. .
Somewhat strangely, in only three of the 13 jurisdictions it was optimal to start OAS at age 70. And in her two jurisdictions, the optimal strategy also allowed the couple to withdraw Income Security Supplement (GIS) in certain years.
Not shown in this chart is the cost of living by state or jurisdiction, which may offset some of the income benefits shown in the chart. Therefore, a nationwide retirement rush in Nunavut may not materialize.
Frédéric Vettese is a former chief actuary at Morneau Shepell. PERC Retirement allowance calculation tool (www.perc-pro.ca)
