FIRE Advanced Toolkit Advanced Analysis

Monte Carlo runs thousands of randomized return sequences (using historical volatility) and tells you what percentage of those paths still had money at age 90. A 90%+ success rate is generally considered safe for early retirement planning.

Taking CPP at 60 permanently reduces it by 36%. Deferring to 70 permanently increases it by 42%. The break-even vs. taking at 65 is roughly age 74 for deferring to 70. For early retirees in good health with a large portfolio, deferring to 70 typically wins.

RRSP meltdown means drawing down your RRSP in controlled amounts (e.g. $25,000/year) before age 65, before OAS/CPP arrive and push you into higher tax brackets. This keeps each withdrawal in a lower marginal tax bracket and avoids a forced RRIF conversion at 71 creating a large taxable income spike.

Sequence-of-returns risk is the danger of poor market returns in the first few years of retirement, while you are drawing down. Two portfolios with the same average return can end very differently: a crash in year 1–3 (when the balance is largest and you are still withdrawing) can permanently cripple a plan, while the same crash at year 20 barely matters. This is why Monte Carlo success rate matters more than a single average-return projection.

Generally, drawing RRSP/RRIF first (the "meltdown") in low-income early-retirement years fills up your low tax brackets cheaply and shrinks the taxable RRIF before age 71. The TFSA — which grows and withdraws tax-free and has no forced withdrawals — is best preserved for later, for large one-off expenses, and for estate efficiency. The drawdown tool models the tax difference between orders for your numbers.