CPP — Canada Pension Plan
CPP is a taxable retirement benefit based mainly on a person's CPP contributions during working years and the age when benefits start.
Glossary
These definitions are simplified for planning. They are intended to help users understand the estimator, not replace official tax, legal, or financial advice.
OAS — Old Age Security
OAS is a taxable federal pension for eligible seniors. The amount can depend on age, years of residence in Canada after age 18, and income level.
GIS — Guaranteed Income Supplement
GIS is an income-tested monthly benefit for eligible low-income OAS recipients. CPP, pensions, RRSP/RRIF withdrawals, and other income used in the GIS calculation can reduce it, while TFSA withdrawals generally do not. Actual payments are generally recalculated each July using income from the previous calendar year.
TFSA — Tax-Free Savings Account
A TFSA is an account where investment growth and withdrawals are generally tax-free. TFSA withdrawals usually do not count as income for OAS recovery tax or GIS calculations.
RRSP — Registered Retirement Savings Plan
An RRSP is a tax-deferred retirement savings account. Contributions may reduce taxable income, but withdrawals are taxable.
RRIF — Registered Retirement Income Fund
A RRIF is commonly used after converting an RRSP in retirement. RRIF withdrawals are taxable and minimum withdrawals are required after the RRIF starts.
RRIF minimum withdrawal
The minimum amount that must be withdrawn from a RRIF each year once minimum-withdrawal rules apply. The withdrawal is taxable even if the money is not needed for spending.
OAS recovery tax / OAS clawback
A repayment of OAS that can apply when taxable income is above the annual threshold. It reduces the net value of OAS for higher-income seniors.
Inflation
The rate at which expenses rise over time. The estimator projects future expenses using inflation instead of assuming today's expenses stay unchanged.
Investment return
The expected growth or loss on savings and investments during retirement. Returns can help assets last longer, but actual market results can be higher or lower.
Cash reserve
Money kept aside for emergencies and near-term needs. The estimator separates a recommended reserve from long-term retirement assets.
Survivor risk
The risk that income changes after one spouse dies. One OAS payment stops, CPP may change, and workplace pensions may continue at a reduced survivor percentage.
Net spendable income
Income available to pay expenses after estimated tax. This is more useful than gross income because taxes reduce what can actually be spent.
Monthly shortfall / surplus
The difference between net spendable income and essential monthly expenses. A shortfall means savings withdrawals are needed; a surplus means income is expected to cover expenses.
Essential monthly expenses
Recurring costs needed to maintain the household, such as housing, utilities, food, insurance, transportation, internet, cell phones, and medical costs.
Downsizing
Selling a current home and moving to a less expensive property or rental. In the estimator, downsizing can reduce monthly housing costs and release home equity into cash.
Net cash released
The estimated cash left after selling a home, paying the remaining mortgage, selling costs, buying costs, moving costs, and any replacement property purchase.
Mortgage closure on sale
When a property is sold, the remaining mortgage is usually paid from sale proceeds. The estimator stops mortgage payments after the downsizing or sale year.
Withdrawal order
The sequence used to draw from cash, TFSA, and RRSP/RRIF assets when income is not enough to cover expenses. Registered withdrawals are taxable and may reduce GIS, so the order can affect taxes, benefits, and how long assets last. Comparing withdrawals before and after OAS/GIS begins can reveal important trade-offs.
Tax estimate
A simplified estimate of federal and Ontario income tax on taxable income such as CPP, OAS, pensions, and RRSP/RRIF withdrawals.
Savings durability
An estimate of how long retirement assets last under the selected assumptions. The result may show the year assets run out or confirm that the target age is reached.
This glossary is for educational purposes only and is not financial, legal, or tax advice. Benefit amounts, tax brackets, thresholds, and RRIF factors should be maintained in versioned rule files and reviewed before production use.