Your Retirement Number Isn’t a Number. It’s a Sensitivity Analysis.
Part 3 of a five-part series on the math behind your savings number. Part 2 landed on a single retirement target; this part flexes the four inputs behind it — spending, government benefits, return, and longevity — one at a time, to show which actually move the number and which barely do.
This is part 3 of a five-part series on the math behind your savings number. Each part stands alone; together, they walk from “what’s the goal?” through “how much do you need?” to “what will you do with the time once you have it?”
The short answer: the retirement number you fixate on is the output of four inputs — how much you spend, how much you get from CPP (the Canada Pension Plan) and OAS (Old Age Security), what your portfolio returns, and how long you live. They do not matter equally. For a typical mass-affluent Canadian household, the order of impact is: 1) spending; 2) government benefits; 3) investment return; and 4) longevity. That ordering inverts how most retirement articles weight these levers, and it changes where the attention is best spent.
The Canadian retirement number we worked out in Part 2 came from a single worked example: a $150,000 earner, retiring at 65, planning to age 95, earning a 3.0% real (after-inflation) rate of return, drawing roughly $24,000 a year from CPP and OAS, needs a portfolio of about $1.73 million in today’s dollars. That’s a clean figure, and it’s convenient to treat as a north star.
It isn’t really a north star, though. It’s a coordinate along the way — one point that moves when any of the four inputs move. The useful skill isn’t memorizing the point. It’s knowing which direction to turn depending on how the wind blows.
So here’s the same household, with one input flexed at a time and the other three held at the base case.
Which input changes your retirement number the most?
Spending does — by a wide margin. Here’s the household’s number at three replacement rates of a $150,000 salary:
| Annual spending | % of salary | Portfolio needed |
|---|---|---|
| $90,000 | 60% | $1,291,000 |
| $112,500 | 75% (base) | $1,732,000 |
| $135,000 | 90% | $2,173,000 |
A 30% delta in the spending rate as a share of salary moves the number by about $882,000. Nothing else in this analysis comes close. And spending is the input that many people treat the least precisely. “I’ll probably live on less” is doing an enormous amount of unexamined work — both in the mental math and in the assumptions about what you’ll actually do with your future that you aren’t doing now. It’s also the lever most under your own influence, which is worth sitting with.
Do CPP and OAS really change the math that much?
More than most people expect — this is the second-biggest lever. CPP and OAS are an income stream your own savings don’t have to fund. Every dollar of guaranteed annual benefit is a dollar your portfolio is off the hook for, multiplied across a 30-year retirement. (The figures below are anchored to the 2026 CPP and OAS maximum benefit amounts published by Service Canada.)
| CPP + OAS (annual) | Scenario | Portfolio needed |
|---|---|---|
| $10,000 | One modest CPP | $2,009,000 |
| ~$24,000 | One near-max (base) | $1,732,000 |
| $40,000 | Dual near-max couple | $1,421,000 |
The spread here is about $588,000. The dual-earner case is the one to notice: a household where both partners qualify near the CPP maximum carries a materially smaller portfolio target than a single-benefit household at the same spending level. For two-professional households, that’s not a rounding error. It’s a structural feature of the Canadian system that the salary-multiple rules of thumb ignore entirely.
What about investment returns?
Returns matter, but less than the financial-media attention they get would suggest. Here’s the number at three real (after-inflation) return assumptions:
| Real return | Portfolio needed |
|---|---|
| 2% (conservative) | $1,979,000 |
| 3% (base) | $1,732,000 |
| 4% (optimistic) | $1,528,000 |
A full two percentage points of real return moves the number by about $451,000. It’s meaningful, but smaller than spending or government benefits. And here’s the part worth being honest about: of the four inputs, return is the one you don’t control. Keep in mind we’re being conservative here — this is based on FP Canada’s Projection Assumption Guidelines (the 2026 edition, published jointly with the Institute of Financial Planning), estimating return after inflation and fees on a diversified 60/40 portfolio. If you’re 100% invested in XEQT and that’s going well, then great — but that isn’t a realistic long-term return target. Markets deliver what they deliver. Building a strategy that only works if you hit the optimistic row is a different thing from building one that holds at the conservative row.
How much does living longer change the number?
Less than the worry it generates — it’s the smallest of the four levers.
| Years in retirement | To age | Portfolio needed |
|---|---|---|
| 25 | 90 | $1,539,000 |
| 30 (base) | 95 | $1,732,000 |
| 35 | 100 | $1,899,000 |
Planning for five extra years — to 100 instead of 95 — adds about $167,000. The full 25-to-35-year span moves it roughly $360,000. This is counterintuitive, and the reason is discounting: a dollar of spending 35 years out is worth far less in today’s terms than a dollar spent next year, because the portfolio keeps earning while you draw it down. Longevity is real risk, but it’s cheaper to plan long for than most people fear.
The order of impact, and what it implies
Lining the four ranges up, over plausible variation for this household:
- Spending: ~$882,000. The biggest lever, and the most underexamined.
- Government benefits: ~$588,000. Bigger than people think, especially for dual-earner couples.
- Investment return: ~$451,000. Significant, but the one input you can’t control.
- Longevity: ~$360,000. The smallest, thanks to discounting.
One caveat, in the interest of precision: this ordering reflects how far each input plausibly varies for a household in this income band, not a universal law. If your portfolio outperformed — say, 5% real, consistently, for 20 years — returns would dominate; but that isn’t a realistic spread for a balanced portfolio. The point is the ranking of believable assumptions.
What the math shows is this: the inputs that move your number most are the two you have the most say over — what you spend, and how you structure benefits within a couple. The input that gets the most airtime, returns, sits third and is largely out of your hands. And the fear that drives a lot of over-saving — outliving your money — is the gentlest lever of the four.
A retirement number isn’t a finish line you compute once. It’s a surface you can see the shape of. It’s what turns “am I saving enough?” from an anxiety into a question with a structure — one you keep updating as time goes on.
Part 4 takes the target from these first three posts and runs the other direction: given where you are today, what monthly contribution actually gets you there. There’s a calculator.
See which lever moves your number. Adjust your own spending, CPP and OAS, return, and longevity assumptions on YouGotThis and watch the target respond.
See your full picture — investments, debt, retirement, education, estate — in one view, and explore what different assumptions would actually cost.
Get started free →Educational illustration only. Not financial, investment, tax, or legal advice. The figures above come from a simplified present-value model (steady real return, level real spending, no taxes modelled) and are meant to build intuition, not to size any individual’s strategy.