How much income will $100,000 pay you in retirement?

How much income will $100,000 pay you in retirement?

Many financial calculators spit out a number to answer the question ‘how much is enough?’ Those that know me know that I wonder whether there is really such thing as enough?

The problem is retirement is not a number. Whatever the number is, it does not really solve our problems. In fact it just leads to more questions. One of those questions is How much income will I get from my investments?

Using withdrawal rates

One of the ways to ballpark the amount of income you can take from your portfolio is to use a withdrawal rate. The debate over what is a safe withdrawal rate will continue and change but let’s use an example of 4%. If a withdrawal rate is 4%, then on $100,000 you could expect $4000 per year from the portfolio.

Obviously, this approach is a little simplistic and depends on the rate of return you can expect on the portfolio. As safe withdrawal rate assumes a retiree should be in a safe, conservative portfolio. and is meant to ‘annuitize’ the total asset. If you invested in a balanced portfolio and achieved an average return of 4%, then your $100,000 capital would be preserved. The greater the returns, the greater the potential risk in the portfolio and therefore, the greater the variability of returns. When this happens market volatility can really destroy portfolios that are paying out an income because the math works against you.

It all depends

So let’s get back to the question “How much will $100,000 pay you in retirement?” the answer is what is so often is “It depends”

The income off a portfolio depends on many different factors:

  • when are you going to retire and take income?
  • when are you going to die?
  • what rate of return will you get?
  • how much volatility is there in the portfolio?
  • do you want to preserve capital?

If you look at this question from a purely mathematical perspective, it really boils down to 2 things – how long will you live and what rate of return can you expect on your money.

In our retirement workshops we use a little table with these two variables to help answer the question. Here are some different outcomes for different scenarios

  • If you are retired and plan to live 21 years and will make 5% on your money, $100,000 will pay you $7800 per year or $650 per month
  • If you are 70 years old and plan to use your money over 10 years and will make 3% on your investment, that same $100,000 will pay you $11,720 per year or 977 per month
  • If you are 55 and plan to live 30 years but hope to make 7% on your investment, every $100,000s will pay you $8060 per year or $672 per month
  • If you plan to live 25 years of retirement but are optimistic about earning 10% on your investment, that same $100,000 will now pay you $11,020 per year

As you can see, the range of outcomes can vary dramatically depending on how many years you will receive income and what return you will earn on your investments. We all want a simple answer and often default to the ‘safe withdrawal rate’ but that method is overly simplistic.

You can download the cheat sheet that I use to help estimate a safe withdrawal rate based on these two variables.

Making adjustments

Let’s imagine your retirement savings is like a bucket of money. When you are ready to retire, you simply have to “tap the bucket” to start drawing an income. The math above is simply a starting point to guide your decision about how much income you can take from the bucket or how much income you can expect in your retirement. If you think about it, you can open the tap to take more money out or you can close the tap so less money flows out. If you open up the tap, then you run the risk of using up the money it the basket too quickly and running out of money.

Government restrictions

Some of the buckets of money that you have, will have different rules around withdrawals. A good example of this is a Registered Retirement Income Fund (RRIF). If a RRSP is a bucket of money, the RRIF is simply a bucket of money that has been tapped with for income. You can open this tap as much as you want but there are rules that will not allow you to close the tap completely. It has to be open a minimum amount, known as the minimum RRIF withdrawal rules

Related article: RRIF minimum withdrawal rules

Withdrawal calculators

Another way to figure out how much $100,000 will pay you is to use some free online financial calculators. I’ll share a couple that I use.

The ATB regular withdrawal calculator is a really simple calculator. The financial calculators I used to use the most was from Mackenzie Financial but was taken down in 2021. The ATB Calculator is similar.

The Retirement Withdrawal Calculator does much the same thing as the Money-Zine calculator but it allows you to account for inflation on your income as well as preserving a lump sum amount of your asset.

Another withdrawal calculator that was suggested to me was from



  1. Brian Poncelet,CFP


    How about $8200 per year for life? Guaranteed.

    Taxes payable about $750 a year.

    Called annuity.



    • Julian

      Hi Brian,

      Can you please expand on this? We’re looking for options for my parents and a guaranteed 8% seems unheard of, according to the different places we’ve looked. However, if you’re offering that, we’dlove to look into it


      • 2018-09-28 Dave

        Julian . It’s a waste of key strokes asking Brian Poncelet for details. I’ve asked previously and didn’t get a response. You, like I have, should just conclude that his post is BS.

      • Mary

        Brian, this is misleading. The only way anyone could receive $8200 per year for life on a 100,000 annuity is if he / she were a) In their late 70’s and b) it was a single life annuity (not joint). Plus you show an assumed tax rate of less than 10%. Unless you know their personal tax situation, how can this be defined?

        I too would like to better understand your proposed solution.


    • Victoria R Wagner


  2. bob

    annuity’s purchasing power is washed away by inflation!

    • Thomas

      Yes, savings have to be part of a budget. Ideally, the amount being saved can be used to buy another annuity in a few years, thus allowing one’s lifestyle to be maintained even while continuing to save for yet another annuity or other investment vehicle.

  3. SPBrunner

    I had read a lot about this subject before I stopped working and decided to take 4% from my portfolio per year. I stopped working in 1999. Then came 2000 and then 2008. I changed my mind and I only take out the equivalent to dividends earned each year.

    • Claude Mayrand

      The fluctuations in markets is the exact reason why taking out only the income is the perfect strategy.

      The actual capital is secondary as long as it produces the income we need.

      It’s another reason RRIFs are a flawed retirement income vehicle.

      • RAHAT KHAN

        Hi claude,
        Can you please elaborate further.
        I am new to discussion!

        • Claude Mayrand


          Search my name on this website. Take charge of your finances, don’t rely exclusively on others.

          Educate yourself about retirement income; attend free seminars, lookup

      • andrew

        RRIF”S are designed for the Gov’T to get their deferred taxes back rather than waiting for you to die

  4. Dave


    What age are you basing your 8200 on? That’s just short of 700 per month. Best I can see for annuities is about 500 per month on 100k. Please provide more details.

  5. Jim Thomson

    My financial advisor told me not to bother buying an annuity at these ultra-low interest rates because returns are too low.

    • Thomas

      Can your advisor suggest another vehicle for a guaranteed income significantly higher than a bank deposit? An idea to consider is that of buying an annuity that would cover non-discretionary expenses while investing the rest of your money in growth stocks or etfs. Of course this advice is given knowing absolutely nothing about you!

  6. Mary

    I always find these articles do not discuss the complexities associated with the minimum and maximum withdrawal rates for LIFs and RIFS. No one can just arbitrarily select a flat percentage rate for withdrawals if their money is in registered funds. The great majority of today’s investors would fall into that category.

    • Claude Mayrand


      I realized this particular problem would occur as I learned a little more each year about my RRSP; how do I get the money out when retiring?

      When I found out the amount was fixed by some ambiguous complex rules subject to change at any time, I decided to liquidate my RRSP before 71, and I also decided to look into other means to accumulate and regulate my retirement income.

      So far, so good. Even going through this January 2016 stock market rout.

  7. Ramesh


    What was the result/tax impact of liquidating your RRSP before 71 and how did that strategy help?

    • Claude Mayrand


      At present there’s only ±$15,000 left in my RRSP. So not much impact. Most of my withdrawals over the were of similar size.

      In previous years, the withdrawals were partly deposited in my TFSA. Any tax withheld was mostly refunded.

      Most of my income is from dividends, some from Return Of Capital; I pay very little income tax because of 2 major factors. I have no interest income at all in my taxable account.

      One can earn ±$53,000 in dividends before paying any income tax. Return Of Capital is income tax deferred until I sell the stock/fund; it’s not even counted on my tax return; the deferred income then becomes taxable like capital gains.

      My major portfolio is a Margin Account; that interest is 100% tax deductible from my taxable income. (My income is very tax advantaged and my interest expense is 100% tax deductible)

      Because I’m way over 20, I’m not perfect anymore. Any stock losses are applied against any stock profits.

      The highest income tax percentage I’ve paid (line 435 ÷ line 260) since 2008 is 8.8%.

      My portfolio focus is how much income I can generate with my portfolio. The value of my portfolio is the least of my portfolio priorities.

      I know, I know… Another rant but I wasn’t busy Sunday.

  8. Kalib


    I am glad I came across your informative site.
    I have a question relating to estimating my CPP benefits at the age of 65. I just turned 56 and planning to work full time until 65.

    Currently, If I were 65 today,you could receive a monthly retirement pension of: $608.37 according to Service Canada


  9. Nahk kahn

    I am a 58 year old with 70-80K P/Y income for last 10 years. Since last year I am working partially with same employer due to a work related disability and my total annual intake is dropped to 30-35K.

    I will appreciate if someone could advise as to what are my options and should I continue working with modified schedule (with less hours) as this may affect my CPP entitlement if I retire at 60.

    • Claude Mayrand


      Two things come to mind.

      If you retire at 60, will you still be working?

      Since you now have paid time on your hands, and you are showing interest in managing your money, educate yourself about investing – the types of investments and investment income like dividends and their implications on income tax, the plethora of free reputable Internet tools available like

      The learning process is very personal and depends only on you; no one can advise you on how to take your financial future in hand. The alternative is finding someone who will perfectly address your situation at any cost.

  10. Biff

    Hi Jim – I like your blog and find it helpful. One thing that would help more would be a date and time attached to each blog post and each reply. I know some bloggers don’t like to do that but it really does give context to both the posts and the responses.

  11. Danimart

    Have tried to download your “cheat sheet” but it asks me to put in my email address to become a Retire Happy VIP. Since I already am subscribed, I don’t want to do this again and get two emails each time. Can you please fix the link so that those of us who are already subscribed can access it?


  12. Angela

    I am also trying to access the ‘cheat sheet’ and am going in a circle with the request to subscribe (again). Today is March 8, 2018. Time is of the essence during tax season. Thanks.

    • Gerhard

      Same problem – November 2019

  13. Cathy

    Hi. Is this a new article? I am sure I have read it before.

  14. SylvieL

    Many Thanks Jim- I find your updates helpful as I’m starting the retirement planning process now- hope to retire in the next 3 years….

  15. Terry

    How do I know if you have enough money to retire on? Follow these 3 easy steps:

    1. Determine how much money you need to live on. I did this by living like I was retired the year before I actually retired. I cut my expenses to a level I could live with. As I had been tracking my living expenses for the all of my adult life this was not hard for me to do. If you haven’t tracked your expenses before, make sure you are totally honest and track every penny you spend. You are going to be surprised at how much spending adds little to no value to your life. Don’t forget to include an amount for the extra things you want to do after you retire like setting aside an amount for a winter getaway if that is what you desire. Now that you have a number you are comfortable with

    2. Determine all your sources of income you will receive once you retire. If you will not receive CCP, OAS, or other pensions immediately upon retirement don’t count them. Only count guaranteed income sources you will receive now (for income sources you will receive at a later date once you actually receive it will you have a problem enjoying the extra money). Subtract this number from the number you arrived at from step one to determine your income shortage ( if you have an income surplus after this step congratulations your retired).

    3. Now that you have your income deficit take a look at the rate of return you can make on investments that you are comfortable with. For myself I looked at what amount of dividends I could receive from eligible Canadian companies (for the dividend tax credit) that I believed had little or no risk of cutting their dividend. Multiply your investable savings by this rate and if it provides you with enough income to cover your deficit then congratulations you are retired. If not then you’ll have to keep working and saving until you have enough savings to make the equation work. I never included a draw down of my investment principle as I consider the principle as my long term safety net. My principle my go up or down as the markets move but if the income keeps flowing in does it really matter.

    Now people may tell you a bunch of “what if” scenarios, but in all honesty no one can foresee the future. (Inflation is always a factor in retirement decisions which is why I chose dividends from stable companies who have also record for dividend increases) If you make confident decisions with the best information available what more can anyone do. Speaking as someone who pulled the trigger at age 54 (almost 3 years ago) there is so much more to life.

    Why keep playing the game when you have already won.

  16. Bala Kris

    Retirement requirement? Throw every article on this subject out the window.
    You can live frugally at $40K per year. Never mind what you were making, 60% of that needed for retirement etc..

    Here is the scoop: CPP + OAS will get you $1500 a mo. assuming you contributed to CPP all your working life. Your needs will shrink considerably. You will use less gasoline. Old jalopy that you have been driving should last for at least another 10 years because of less driving.

    You have saved together (you+spouse) about $200K in RRSP or in a non-registered ac? 4% of that will give close to $10K per year on dividends. Add it up: $18K + 10K (no debts, no mortgages) should give you a comfortable life. Wife is still living? Add the same $18K to the total income. No company pension for either of you is assumed. This income is way too much money than you can possibly spend. Take one long vacation per year with that “extra” money. Live happy.

    No wife? No prob. you will not need her CPP or OAS to live. You will still collect widowers’ pension. Proportionally, your need for income is lesser as you age.

    Moving to a low cost country is another option too. You can live like a King/Queen there. Come back to Canada every 6 months less a day(get a short term rental for 6 month to live) – just to keep the OAS flowing. There you have it.

  17. Brian

    Became financially independent at age 35. Best strategy is invest in a stable index fund. I like XEI. Right now yields 4.9%. Then take out only the income. We can generate 130k a year right now without working, in our 30s still. Will last the rest of our lives (house paid off in vancouver). I work for fun, on my own schedule and can tell my boss and the powers to be to f-off as I know I’m wealthier than them and they need me more than I need them. It’s a good feeling.

    • Auld R. Feller



      By focusing on the income of your portfolio, rather than capital appreciation, a retirement portfolio is a relatively easy thing to manage.

      For Most younger investors who are still holding down a job, those dividends can be automatically re-invested to build up the capital and eventually generate the income to retire or cut down on the hours spent at a job.

  18. Mary

    Brian, I’d like to better understand the size of the overall portfolio that generates 130K annually with only a 4.9% yield. By my calculations, you would need a base of at least $2.5 million in order for this fund to generate this annual income and last to age 85 (with no further investments), and that does not allow for inflation.

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