Can I Retire at 60 With $1 Million in Canada? (2026)

Retiring at 60 is the goal for a lot of Canadians. It means five more years of freedom while you are young enough to enjoy them. But it comes with a catch that retiring at 65 does not have. Old Age Security doesn't start until 65, and CPP pays less the earlier you take it. $1 million sounds like plenty, but those first five years draw on it before any government money arrives. If you're hoping to retire at 60 with $1 million, it pays to know exactly how that gap gets funded.

Here at Loonie Nest, our mission is to provide free and affordable personal finance education to Canadians so they can gain confidence in their retirement.

Michael's plan at a glance

On track

$1,000,000

saved at 60

RRSP

$600,000

Taxed as income when withdrawn

TFSA

$200,000

Withdrawals are tax-free

Non-registered

$200,000

Only the capital gain is taxed

Spending after tax, in today's dollars

$57,600

$51,840

$46,080

Age 60–74

Age 75–84

Age 85–90

CPP $1,050 a month from 65

OAS $742 a month from 65

Our $1 Million Retirement Scenario

Let's meet Michael. He's 60, single, and living in Hamilton, ON. Michael ran his own electrical contracting business for most of his career, so he never had a workplace pension or employer health benefits. He maxed out his TFSA every year since it launched, built up his RRSP, and invested the rest in a non-registered account. Today he has $1 million saved. He's ready to put the tools down, but he wants to know how the five years before CPP and OAS will affect the rest of his retirement.

We'll run Michael's numbers through Scenario Lab+.

Scenario Lab+ is our proprietary retirement planning software. We'll use it to generate and review a tailored retirement plan for him.

To start, here's how Michael's numbers look as he retires at 60:

Michael's plan inputs: his profile, account balances, CPP and OAS, and monthly spending.

Michael's CPP is $1,050 a month at 65. As a self-employed contractor, he paid both halves of his CPP contributions for decades. His CPP Statement of Contributions assumes he stops contributing at 60, which trims the estimate a little compared with working to 65. If you want a refresher on how both programs work, see our guide to CPP and OAS.

No OAS until 65. Old Age Security can't start before 65, no matter when you stop working. In Michael's plan, both CPP and OAS start at 65.

He invests for growth. Michael has always been comfortable with a stock-heavy portfolio, so his plan assumes it grows 6% a year. We plan his retirement to age 90, and test a longer horizon further down.

His spending falls as he ages. Most retirees spend more in their go-go years, and less later on. Michael's plan starts at $4,800 a month and assumes that his spending steps down as he reaches 75 and again at 85. In Scenario Lab+, these steps are the plan's Spending Phases.

A few other important assumptions: all figures are in today's dollars, Michael is single and owns his home with no mortgage, and inflation runs at 2.5% a year.

Michael's retirement budget

Here is how his $4,800 a month breaks down in his first fifteen years:

Without an employer health plan, Michael budgets a little more for health and dental than someone retiring with group benefits would. Costs also vary a lot across the province. Our guide to the best places to retire in Canada compares cities and regions.

Is $1 Million Enough to Retire at 60?

Scenario Lab+'s results: Michael is in great shape, with room to spare at 90.

For Michael, the results say yes. His plan covers his spending every year and still has $475,732 left at 90. Scenario Lab+ estimates he could spend about $628 more a month and still make it.

That's a stronger result than a generic 4% rule might suggest. Under the 4% rule, $1 million supports about $40,000 a year. Michael draws about $63,200 a year from his savings in his first five years, more than 6% of his portfolio, because no government money has started yet. Once CPP and OAS arrive at 65, his withdrawals drop to about $41,800 a year, and his growth-focused portfolio does the rest.

Bridging the Five Years to 65

The years between 60 and 65 are where an early retirement is won or lost. Michael has no CPP, no OAS and no paycheque, so every dollar he spends comes out of his accounts.

By the end of the year he turns 64, his portfolio is down from $1,000,000 to $839,358. At 65, CPP ($12,600 a year) and OAS ($8,908 a year) start together, and they cover $21,508 of his income for life.

That's the real cost of retiring at 60 rather than 65: five extra years of spending, with no help from the government. For Michael, those years use up about a sixth of his savings, and his plan absorbs it.

How Much Income Does $1 Million Provide?

So how much retirement income does a $1M nest egg generate at 60? For Michael, $1 million provides $63,172 of gross income in his first year, which works out to $4,800 a month after tax.

In his first year of retirement, Michael draws on three sources, all of them his own savings:

Where Michael's income comes from each year, by source.

At 65 the mix changes. CPP and OAS bring in $21,508 a year, and the remaining $41,800 or so comes from his RRSP, TFSA and non-registered accounts.

Scenario Lab+ uses its Proportional drawdown strategy by default, drawing from every account each year roughly in proportion to its balance. That keeps his taxable income steady from year to year. The Drawdown tab runs the same plan through other withdrawal strategies, such as Sequential and RRSP Meltdown, and compares the lifetime tax of each.

How Much Tax Michael Pays

Michael's tax bill in his first year of retirement, at age 60.

Michael pays $5,572 in income tax in his first year of retirement. That works out to about 8.8% of his gross income.

His large TFSA does a lot of the work here. TFSA withdrawals are tax-free, and on his non-registered account he is taxed only on the capital gain in what he sells, with only half of that gain counting as income. His taxable income comes to about $42,300, almost all of it from his RRSP.

Before 65 he doesn't get the age amount tax credit, but he also has no CPP or OAS to add to his income. At 65 both change, and his tax bill stays almost flat at $5,696. He never comes close to the OAS recovery tax (or clawback). Our explainer on the OAS clawback covers how it works and who is affected. To estimate your own bill, try our free Canadian income tax calculator.

How His Plan Changes Over Time

Year-by-year account balances from 60.

In Scenario Lab+, the Table tab shows every account for every year, and the whole table downloads as an Excel file.

Like many retirees, Michael's retirement will not look the same every year.

At 65, CPP and OAS start. His withdrawals fall by about a third, from $63,171 to $41,789 a year, and his portfolio starts shrinking much more slowly.

At 71, his RRSP becomes a RRIF. Every Canadian has to convert their RRSP by the end of the year they turn 71, and a RRIF has a minimum withdrawal each year. Michael already withdraws more than the minimum, so nothing changes much. Our RRIF guide covers the rules.

At 75, his OAS goes up 10% and his spending steps down. OAS pays more from age 75, so his rises from $8,908 to $9,798 a year, while his spending drops to $4,320 a month.

At the end of his plan at age 90, he will still have $475,732, spread across his RRIF ($187,730), TFSA ($144,001) and non-registered account ($144,001). He can treat that as a legacy, as a buffer in case he lives longer, or as room to spend more today.

Based on his numbers, Scenario Lab+ estimates Michael could spend about $628 more every month and still make it to 90.

Income available to Michael compared with what he plans to spend.

Scenario Lab+ shows this in its Recommendations tab, where you can apply the extra spending with one click and see the plan rebuild around it.

But What If We Change the Assumptions?

Michael's base plan is in good shape. The more useful questions are about timing, like when to take CPP and when to stop working. We took his plan and changed one assumption at a time.

4 versions of Michael's plan

One assumption changed in each. Charts show the portfolio from 60 to 90 in Scenario Lab+.

Michael's base plan

Spends at 60

$57,600/yr

Money lasts

Past 90

Left at 90

$475,732

Takes CPP at 60 instead of 65

Spends at 60

$57,600/yr

Money lasts

Past 90

Left at 90

$413,785

Keeps working 3 more years

Spends at 63

$57,600/yr

Money lasts

Past 90

Left at 90

$1,138,859

Plans to age 95

Spends at 60

$57,600/yr

Money lasts

Past 90

Left at 90

$408,488

Scenario 1

Takes CPP at 60 instead of 65

Spends at 60

$57,600/yr

Money lasts

Past 90

Left at 90

$413,785

Taking CPP at 60 sounds like the obvious way to ease the bridge years. For Michael, it costs more than it saves. CPP shrinks by 36% if you start at 60 instead of 65, so he'd get $8,064 a year instead of $12,600, and that smaller cheque lasts for life.

It does take pressure off his savings early on. By 64 his portfolio would be $880,040 instead of $839,358. But from 65 onward he's $4,536 a year behind his original plan, every year. His plan still works, but he finishes at 90 with $413,785, about $62,000 less.

Taking CPP early makes the most sense for someone in poor health, or someone who can't fund the gap any other way. Our CPP and OAS break-even calculator shows where that line falls for you.

Scenario 2

Keeps working 3 more years

Spends at 63

$57,600/yr

Money lasts

Past 90

Left at 90

$1,138,859

What if Michael keeps contracting until 63? Three more years earning about $96,000 a year, still maxing his TFSA and putting $18,000 a year into his RRSP, makes a big difference. He retires at 63 with $1,186,216, and three more years of contributions nudge his CPP estimate up to about $1,120 a month.

The bridge to 65 shrinks from five years to two, and his savings get three more years to grow instead of three years of withdrawals. He finishes at 90 with $1,138,859, more than double his original plan, and Scenario Lab+ estimates he could spend about $1,896 more a month.

Retiring at 60 still works for Michael. This scenario shows what those three years are worth, so he can decide whether the extra freedom is worth the trade.

Scenario 3

Plans to age 95

Spends at 60

$57,600/yr

Money lasts

Past 90

Left at 90

$408,488

We planned Michael's retirement to 90, but plenty of Canadians live longer. So we stretched his plan to 95.

His money still lasts. He reaches 95 with $408,488 left, and Scenario Lab+ estimates he could still spend about $428 more a month. Five extra years of spending barely dent his savings, because by then CPP and OAS cover most of what he needs and his portfolio shrinks only slowly.

That's the real strength of Michael's plan. It doesn't depend on him living only to 90.

Your $1 Million Is Not Michael's $1 Million

So is $1 million enough to retire at 60? For Michael it is, with room to spare. His plan is a starting point, not an answer for anyone else.

Two people with exactly $1 million can end up with very different retirements. What they spend, how much CPP and OAS they receive, how their savings are split between accounts, and how their money is invested can make all the difference. Retiring at 65 changes the picture again, as you can see in our case study of Susan, who retires at 65 with $1 million. Retiring five years earlier asks more of your budget, as Nicole's plan at 55 shows.

The bigger risk is assuming $1 million is enough without running your own scenario.

That's why we built Scenario Lab+.

It is the software behind every number in this article. Give it your own accounts and spending, and it builds the same year-by-year plan for you, including every what-if above. If you'd like to see it first, Michael's full plan is open to explore.