Example · Ontario
Retiring with a holding company
Dan, 55, consults through his corporation, which holds $1.2 million of investments and a rental condo. Leah, 54, is salaried. They plan to retire at 62 and 60. How should they draw from the corporation, their RRSPs and their TFSAs?
The household
- Dan Engineering Inc. bills $240,000 a year and pays Dan a $110,000 salary until he retires at 62. After that it holds only its investments and the condo, like a holding company.
- It has $1.2 million invested, with a cost base of $900,000, and $90,000 in cash. Its condo is worth $560,000 and rents for $31,200 a year. It sells the condo when Dan is 75.
- Leah earns $92,000 a year until she retires at 60. They have $670,000 in RRSPs and $215,000 in TFSAs between them, and a home in Ottawa worth $1.1 million.
- They spend $9,000 a month after tax, plus $25,000 a year for travel from Dan's retirement until he's 82, in today's dollars.
- Their CPP statements estimate $1,150 a month at 65 for Dan and $820 for Leah. As planned, both start CPP and OAS at 65 and don't split pension income.
What Kilter found
As planned, their chance of success is 94%. Assuming typical returns, they leave an estate of $7 million after tax, in today's dollars.
Paying Dan extra dividends up to $58,523 of taxable income a year (where the second federal bracket starts), from his retirement until he's 71, changes nothing here. Their spending already draws at least $136,000 a year in dividends from the corporation then, so Dan has no low-income years to fill.
An RRSP meltdown to the same level over the same years leaves an estate of $7.1 million, about $113,000 more. Their tax over a lifetime is about $101,000 more, and their chance of success is the same.
Starting CPP and OAS at 70 for both and splitting pension income puts their chance of success at 96%, 2 points higher, and the estate at $7.2 million, about $160,000 more.
Retiring 2 years sooner, Dan at 60 and Leah at 58, puts their chance of success at 84%, 10 points lower, and the estate at $5.5 million.
| Choice | Retires at | Chance of success | Estate after tax | Tax over a lifetime |
|---|---|---|---|---|
| As planned | 62 / 60 | 94% | $7 million | $3.5 million |
| RRSP meltdown to $58,523 | 62 / 60 | 94% | $7.1 million | $3.6 million |
| CPP and OAS at 70, pension income split | 62 / 60 | 96% | $7.2 million | $3.5 million |
| Both retire 2 years sooner | 60 / 58 | 84% | $5.5 million | $2.4 million |
Estate and tax in today's dollars, assuming typical returns. Tax is personal, corporate and at death.
- As planned
- RRSP meltdown to $58,523
- CPP and OAS at 70, pension income split
- Both retire 2 years sooner
- Half the simulations end inside the band (As planned)
Why there's no single answer
Money in the corporation is taxed again when it comes out as dividends, or at death. RRSP money is taxed as income whenever it comes out, and at death unless it rolls to a spouse. CPP and OAS grow for each month they wait past 65, up to 70. Which mix leaves the most depends on how much each of them already draws each year, so Kilter works it out for each household rather than following a rule.
Open this household in KilterA free demo, no sign-up. Change anything you like.
How Kilter worked it out
Kilter ran this household month by month from November 2026 to the end of the plan, with each year's federal and provincial tax, the corporation's own tax and the tax at death. The chance of success is the share of 2,000 market simulations in which every expense is paid. Everything else assumes typical returns, in today's dollars with 2.5% inflation. The household is made up from a real question. Open it as a demo to change anything and see it all recalculate.