Naive vs. optimized, in plain terms

The "naive" strategy

• •Draw tax-deferred first (RRSP/RRIF/LIF), then non-registered, then TFSA.
• •It's simple and defers tax on the tax-free accounts — but it maximizes taxable income every year.
• •That pushes you into higher brackets and often triggers OAS clawback.

The "optimized" strategy

• •Searches several account orders and tax-smoothing levels across four retirement phases, evaluating each policy over the complete plan.
• •Prioritizes plans that fully fund spending, then compares tax paid plus estimated tax embedded in ending assets.
• •Still enforces RRIF minimums and LIF limits, and reinvests forced after-tax surplus into available TFSA room first.

The difference

• •The summary's tax-efficiency score compares total tax exposure: tax paid during the plan plus an estimated final-year liquidation tax on remaining assets.
• •The estimate makes plans with different ending account mixes more comparable, but it is not an estate-tax calculation and assumes no spouse rollover.
• •The search is broad but finite, so it identifies the best tested policy, not a guaranteed global optimum.

Spending targets and ending assets

Income-target mode searches for the highest level spending that stays funded in every year. With both toggles on, each benefit-age pair is evaluated at its own sustainable target. A bridge-year shortfall, LIF cap, or later guaranteed-income surplus can leave assets unspent, so the model reports remaining assets rather than promising zero balances. Estimated liquidation tax is only a comparison measure and never bypasses withdrawal limits.