Common Retirement Drawdown Orders – My Own Advisor

September 3, 2026

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Common Retirement Drawdown Orders

If you’ve been fortunate enough to amass some assets for retirement, well, this post is for you – here some common retirement drawdown orders to consider from my perspective and more importantly, why.

Inspired by reader emails and navigating my own early retirement income planning – let’s get right into it.

First, let’s look at some potential or common retirement components:

Retirees might have the following income sources:

Corporate investments
Workplace Defined Benefit (DB) pension
Non-registered accounts
Registered Retirement Savings Plans (RRSPs) / Locked-In Retirement Accounts (LIRAs)
Tax-Free Savings Accounts (TFSAs)
Canada Pension Plan/Quebec Pension Plan (CPP/QPP)
Old Age Security (OAS).

What to spend first? Why?

Image courtesy of The Behavior Gap – Carl Richards:

I believe those answers depend on your primary objectives once retired which may or may always involve taxation.

Manage risk – you want guaranteed income security as much as possible?
Minimize tax upfront – pay as little tax as possible in the early years, defer tax into older age?
Grow the capital – ’nuff said.
Maximize the estate – do you want to leave a legacy?

Here are some options in more detail!

Manage risk:

Withdraw first	Corporate portfolio and personal investments	Drawing assets from your corporation first may make sense, including non-registered assets then RRSPs then TFSAs.
Withdraw last	CPP/QPP/OAS	Deferring government inflation-protected benefits until age 70 will preserve inflation-fighting power – certainly a good idea if you have a DB pension.

Minimize tax upfront:

Withdraw first	Corporate portfolio and non-registered assets	Non-registered investments can be strategically sold for capital gains, with or without any DB pension.
Withdraw last	RRSP/RRIF, LIRA to Life Income Fund (LIF) then TFSA	Deferring your RRSP/RRIF will defer taxation. TFSAs can be withdrawn last.

Grow the capital:

Withdraw first	CPP/QPP/OAS	Yes, you can can start taking CPP/QPP retirement benefits as early as age 60 (though your lifetime benefit will be smaller) and you can take OAS at age 65 – which is pretty standard. This may allow you to grow the capital inside RRSPs/RRIFs or TFSAs.
Withdraw last	TFSA	Needless to say it’s great to maximize tax-free growth via TFSAs. “The first rule of compounding is to never interrupt it unnecessarily.”

Maximize the estate:

Withdraw first	All personal investment assets, except TFSA	Money left in an RRSP/RRIF at death is usually fully taxable in an estate. You should enjoy the money you’ve earned while you are alive and if you want to leave a legacy, leave other assets like your primary home and TFSAs to beneficiaries.
Withdraw last	TFSA	Draw this last account last since TFSA assets can continue to grow with no future tax implication to you or your estate!

A big reminder!

Watch out for RRSP and RRIF taxation

What is our drawdown order?

Now that we’re retired, we’re focused on this order for asset decumulation:

“NRT” = Non-Registered (N) with Corporation withdrawals, along with RRSP assets (R), then TFSAs (T).

This is actually the default logic in fact for many professional software programs.

The reasoning behind it is to maintain tax-deferred accounts and tax-free accounts compounding as long as possible. In doing so, we will be able to adjust the timing of CPP and OAS income streams for the bond-like, inflation-protected income I mentioned above.

Here is a summary of my thinking and I will amend this table over time too should anything change.

Account Type	Details	*My Own Advisor* Drawdown Order Considerations
Taxable Accounts	Non-Registered Accounts	Liquidate slowly or first. Allow tax-deferred or tax-free assets to keep compounding. Canadian dividends and/or capital gains can be an efficient form of taxation.
Tax-Deferred Accounts	RRSP/RRIF, LIRA/LIF	Liquidate second, certainly this might come first if you don’t have any significant taxable accounts. Withdrawals trigger ordinary income tax but keeping a large, registered (RRSP/RRIF) balance intact for too long (i.e., until your 70s) can impact government (OAS) clawbacks.
Tax-Free Accounts	TFSA	Liquidate last. TFSA assets as the last account standing can serve as the ultimate tax buffer to avoid higher tax brackets since all growth and withdrawals are tax-free. Great for longevity risks and estate planning – this could be a very large (!) emergency fund as you age.

What is your potential drawdown order? Have you considered the following in your planning?

Manage risk?
Minimize tax upfront?
Grow the capital?
Maximize the estate?

Stay tuned to more blogposts on retirement income and planning as my thinking matures.

Mark

Further Reading:

There are also dozens of FREE Retirement stories and essays you can learn from here.

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