HOW THE ALULA MODEL WORKS

Monthly steps. Everything happens on monthly boundaries. Real life doesn't work this way (your paycheque might land on the 15th, your mortgage on the 1st), but monthly granularity keeps the model transparent and fast. Intra-month timing can change cash balances, fees, growth, and withdrawals, so treat the result as a planning approximation and compare scenarios rather than assuming the timing difference is immaterial.

You choose when the plan starts. The questionnaire lets you select a current or future start month and year. That date is the first simulated month and determines your age at the start of the projection. Available dates are limited so a still-working user can still choose a valid retirement age. Starting later shortens the modeled saving horizon, so compare scenarios with the same start date when evaluating other changes.

One inflation rate. You set a single inflation rate and it applies broadly across your plan (expenses, income growth, OAS thresholds, contribution room projections, etc.). In reality, different costs inflate at different rates. Groceries, housing, and healthcare all move differently. A single rate is a reasonable simplification for planning purposes, and you can always run scenarios with higher or lower rates to see the impact.

How to read charts and data tables. Each chart includes a screen-reader-only data table with the same annual scenario-estimate points shown visually. Nominal values are amounts in each projected year. “Today’s dollars” divides each value by accumulated inflation from your current age to that projected age, using that scenario’s single general inflation-rate assumption. In Compare, each scenario is adjusted with its own current age and inflation assumption before values are aligned by age. Hiding a visual series does not remove its table data; the table labels it as hidden. These are hypothetical scenario estimates, not forecasts or guarantees.

Tax rules are frozen at the most recent year available. Alula uses an approximation of Canadian tax rules based on the most recent tax year coded into the engine (currently 2025). As new tax years are published, the engine will be updated, but it always applies one fixed set of rules across your entire plan. It does not predict future tax law changes, because nobody can. This means future taxes could be higher or lower than what the model shows.

Taxes settle once per year, in April. Rather than simulating pay-as-you-go withholding throughout the year, the model assesses and settles modeled prior-year tax in April. This is a simplification. In real life, withholding, instalments, deductions, credits, and filing adjustments can spread or change both timing and the final amount. The April settlement can therefore make cash balances and withdrawals differ from real life; it should not be read as a tax-return calculation.

Pre-retirement tax is limited. Before retirement, Alula classifies and taxes recurring income when it is paid — CPP, OAS, defined benefit pension, employment, and self-employment — and also classifies registered withdrawals and realized capital gains whenever those cash events happen (for example RRIF/LIF mandatory minimums after conversion, or withdrawals used to fund April tax settlement or chequing top-ups). Non-registered interest and dividends are classified whenever they are earned, in both the saving and spending years. Reinvested non-registered interest and dividends increase your adjusted cost base (ACB) so the same dollars are not taxed again as capital gains when you sell. RRSP contribution deductions are still modeled starting at retirement. There is no full paycheque withholding simulation during the saving years — tax still settles once per year in April.

All dividends are treated as eligible dividends. As a simplification, Alula assumes that all dividend income is eligible dividend income. In reality, some dividends (particularly from smaller Canadian corporations) are classified as "other than eligible" and receive different tax treatment. This simplification may slightly understate the tax on dividend income in some cases. The tax engine also handles capital gains and common credits, but does not attempt every provincial credit nuance or aggressive tax-arbitrage strategy. It's a solid planning estimate, not a line-by-line T1 replacement.

Monthly savings are a scenario estimate determined by the solver (plannedContributionMonthly). The questionnaire does not ask for a preset monthly contribution. Alula initializes this value to zero and searches for one constant monthly savings amount during accumulation (when applicable). A feasible result is rounded to a whole-dollar monthly amount. The solver has an internal search limit of $250,000 per month; if it cannot find a feasible amount within that limit, the interface marks the target as unavailable instead of presenting the limit as a recommendation. A displayed target is in nominal dollars and assumes the inputs, fixed returns, inflation, tax rules, and other simplifications on this page continue as modeled. It is an output for that scenario, not a prediction, guarantee, or user-entered assumption. You cannot schedule gradual increases, pauses, or bonus-driven contributions — it is one flat amount for the entire pre-retirement period.

The end-of-plan target starts in today's dollars. The amount you enter as the desired value remaining at the end of the plan covers only modeled financial accounts. Alula compounds that target using the scenario's single inflation rate and compares the resulting nominal target with nominal account balances at the end age. It is not an estate-plan valuation and does not include a home or other unmodeled property.

Contributions use a chequing cash hub and fixed priority. Each modeled monthly contribution first enters the selected chequing account. Cash above the end-of-month chequing target is swept to investment accounts using the selected TFSA-first or RRSP-first strategy, subject to modeled contribution room; non-registered accounts receive remaining investable cash. Accounts with the same priority are processed in stable account-ID order. This deterministic routing supports auditability but is not a tax-optimization recommendation.

RRSP room is estimated, not exact. RRSP contribution room is projected using a simplified formula. It doesn't account for pension adjustments from defined benefit plans, and carry-forward amounts may drift from your actual CRA Notice of Assessment over time. For future years, the RRSP dollar limit is projected using your plan's inflation rate. The government may set it differently.

Starting contribution room is what you enter. Alula doesn't reconstruct your history from CRA records. If your entered room is off, your projections will be too. We recommend checking your CRA My Account for accurate numbers.

Returns are fixed, not random. Chequing and savings accounts use the annual interest rate entered for them. Investment accounts use fixed asset allocations and component assumptions for cash interest, fixed-income interest and capital appreciation, and equity dividends and capital appreciation. Annual assumptions are converted to monthly rates and applied consistently. Investment accounts can switch once to a second return/allocation regime at the configured age (by default, retirement age). Markets don't work this way: returns vary, and their sequence matters, especially early in retirement. A fixed-return projection does not show a probability range or sequence risk. Run lower-return scenarios to stress-test the plan.

Fees are monthly model inputs tied to your selected plan start. New account rows default both the monthly flat fee and annual percentage-of-assets fee to zero. Entered flat fees are charged monthly, and the annual percentage is divided by 12 and charged monthly against the post-growth balance; a fee cannot reduce its own account below zero. In the first plan year, fees begin in the plan start month you selected. From later Januarys, fees apply every month. This may not match the billing date, compounding convention, or tax treatment of your real fees.

LIF shares RRSP/RRIF discretionary withdrawal priority. When Alula needs cash beyond mandatory minimums, LIF accounts are drawn in the same strategy bucket as RRSP and RRIF (before savings). LIRAs remain locked for discretionary spending until converted to a LIF. If several accounts share the same priority, Alula drains them in a fixed account-id order for auditability — not because that order minimizes tax.

LIF maximums are not enforced. Alula applies LIF minimum withdrawals correctly, but does not enforce provincial LIF maximum withdrawal limits. This means the model might allow you to withdraw more from a LIF than you legally can, which could overstate your available spending. If you have significant LIF assets, keep this limitation in mind. Your actual spendable cash may be lower than what Alula shows. Why don't we enforce LIF maximums? Because the rules governing LIF maximums are set by each province, vary significantly across jurisdictions, and change over time. Modeling them accurately would require collecting additional detailed information from you, information that most people don't have readily available. Rather than model it poorly and give you false confidence, we've chosen to leave it out and be upfront about the limitation.

RRIF and LIF minimums use an equal-month schedule. The annual minimum is calculated from the modeled January balance using the prescribed factor table, then scheduled as one-twelfth per month. Other withdrawals during the year credit the remaining obligation, so the model does not withdraw the same minimum twice. Real payment frequency can differ.

Configured, not calculated from contribution history. CPP and OAS are modeled based on the amounts, start ages, and settings you provide. Alula does not connect to Service Canada or reconstruct your CPP contribution history to estimate your actual benefit. For the most accurate inputs, use the Canadian Retirement Income Calculator on the Service Canada website.

Benefit adjustments are formula-based approximations. CPP starts from the age-65 monthly amount you enter, decreases it by 0.6% for each month before 65 or increases it by 0.7% for each month after 65, and then follows the scenario's inflation setting. OAS starts from the age-65 amount you enter, prorates it by years of Canadian residence up to 40 years, increases it by 0.6% per month of deferral after 65, and applies a 10% uplift from age 75. These rules do not validate your actual entitlement or replace Service Canada estimates.

Start ages are independent of retirement. You can start CPP (ages 60–70), OAS (ages 65–70), defined benefit pension, employment, and self-employment income before your chosen retirement age — for example, collecting CPP at 70 or a DB pension at 65 while working until 75. Those income streams are deposited from their configured start ages onward. Retirement living expenses still begin at retirement. Because Alula does not model day-to-day living costs before retirement, income received while you are still working increases investable cash in the plan.

OAS clawback is modeled. The OAS recovery tax is calculated based on your prior-year income, capturing this important tax effect for higher-income retirees. The calculation uses a reasonable proxy for your net income, though it may differ slightly from the exact CRA line-by-line calculation. That proxy includes employment, self-employment, DB pension, CPP/OAS, registered withdrawals, capital gains, and non-registered interest and dividends when those amounts occur in the plan.

Single person only, no spouse or partner modeling. Alula does not support modeling a household with two people. There is no way to add a spouse or partner, which means no joint account optimization, no pension income splitting, no survivor benefits, and no combined CPP/OAS household planning. This is a known limitation. If you're part of a couple, the model cannot capture the financial interactions between you and your partner.