How much do I need to retire in Canada?

A common rule is to accumulate 25× your annual expenses (the "4% rule"). Use the Solutech Retirement Planner to model CPP, OAS, and your personal savings rate for a Canadian-specific estimate.

What is the OAS clawback threshold in Canada?

In 2025 the OAS Recovery Tax kicks in when net income exceeds $93,454. For every dollar above that threshold, 15 cents of OAS is clawed back. The planner models this automatically.

When should I start CPP?

You can start CPP as early as 60 (with a reduction) or as late as 70 (with an 8.4%/year increase after 65). Delaying is usually advantageous if you expect to live past your mid-70s.

When can I claim Social Security in the USA?

You can claim Social Security as early as age 62 or as late as age 70. Claiming early reduces your benefit; claiming at Full Retirement Age (66–67 depending on birth year) gives your standard benefit; claiming at 70 maximizes it with an 8% annual increase. The Solutech planner calculates your Primary Insurance Amount and all claiming scenarios.

What is the difference between a 401(k) and Roth IRA?

A Traditional 401(k) lets you contribute pre-tax dollars and pay taxes in retirement. A Roth IRA lets you contribute after-tax dollars but withdrawals are tax-free. The Solutech planner models both with employer match and Required Minimum Distributions (RMDs) starting at age 73 (SECURE 2.0).

How much can I contribute to a 401(k) in 2025?

In 2025, you can contribute up to $24,500 to a 401(k) (or $30,500 if age 50+). Your employer may also add matching contributions. The Solutech planner lets you model various contribution rates and employer match scenarios.

Planning6 min read

Monte Carlo Simulation for Retirement: What It Means and Why It Matters

What Monte Carlo simulation is, why straight-line projections mislead retirees, and how a success rate of 85% should shape your retirement spending plan.

By Solutech·April 2026

What Is a Monte Carlo Simulation?

A Monte Carlo simulation is a technique that runs thousands of different versions of the future — each with a different randomized sequence of market returns — and then counts how many of them end with your portfolio still intact. The output is a success rate: the percentage of scenarios where you didn't run out of money.

Named after the famous casino district, the method uses randomness — not to gamble with your future, but to stress-test it. If your plan survives 850 out of 1,000 simulated market histories, your success rate is 85%.

How Solutech runs it: The planner runs 1,000 Monte Carlo simulations using your inputs — retirement age, spending, CPP/OAS amounts, portfolio size, and expected return. Each simulation randomizes annual returns around your expected return with realistic volatility. The result is your retirement success rate shown on the dashboard.

Why a Single "Straight-Line" Projection Can Mislead You

Most retirement calculators show you a single projection: assume 6% annual returns, subtract withdrawals, and draw a line to age 90. This is useful for ballpark estimates but dangerously misleading for real planning.

Real markets do not deliver consistent annual returns. They crash, recover, stagnate, and boom — in an order that retirement calculators can't predict. The sequence of returns matters enormously once you start withdrawing, and a straight-line average hides this risk entirely.

Two retirees, same average return, very different outcomes

Retiree A — Lucky Sequence

Strong early returns (10%, 12%, 8%) followed by a crash at age 80. Portfolio grows large before the downturn. Withdrawals are small relative to a large base. Outcome: survives comfortably.

Retiree B — Unlucky Sequence

A crash in years 1–3 (−30%, −10%, +5%). Withdrawals compound the damage when the portfolio is already depleted. Recovery comes later but the math never catches up. Outcome: runs out at age 82.

Both retirees had the same average return over 30 years. A straight-line projection showed the same outcome for both.

Sequence of Returns Risk: The Retirement Killer

Sequence of returns risk is the danger of a major market downturn occurring early in retirement — right when you start drawing down your portfolio. A crash at 65 is far more damaging than the same crash at 75, because you have fewer years to recover and the portfolio is at its peak exposure.

This is why the period from five years before retirement to five years after — sometimes called the "retirement red zone" — deserves special attention. Canadians in this window should consider:

Gradually shifting to a more conservative allocation
Holding 1–2 years of living expenses in cash or short-term bonds
Using CPP and OAS as a floor that doesn't depend on portfolio performance
Delaying CPP (if possible) to reduce portfolio drawdown in early retirement

How to Read Your Success Rate

Your success rate is not a pass/fail score — it's a planning lever. Here's how to interpret the ranges:

90–100%Highly conservative

You are likely over-saving or under-spending. Consider increasing spending, retiring earlier, or leaving a larger estate. A very high success rate often means unnecessary sacrifice.

80–90%Target zone

Most financial planners consider 80–90% the ideal range — confident but not recklessly conservative. You have meaningful margin for error without hoarding unnecessarily.

70–80%Acceptable with flexibility

Viable if you are willing to adjust spending in bad markets (e.g., cut discretionary spending during a downturn). The sequence risk is real but manageable with flexibility.

Below 70%Needs attention

Material risk of running short. Consider later retirement, higher savings rate, reduced spending, or delaying CPP to provide a larger guaranteed income floor.

The goal is not maximum confidence — it's right-sized confidence. Shooting for 100% often means retiring later or spending less than you need to. The tradeoff is real: a few percentage points of success rate can represent years of unnecessary sacrifice.

See Your Retirement Success Rate — Free

Enter your retirement details and get your Monte Carlo success rate from 1,000 simulations. Adjust your spending, retirement age, and CPP start age to see what moves the needle.

Run Your Monte Carlo Simulation

Free · No account needed · 1,000 simulations in seconds

Back to all articles Open the Planner