The engine performs a year-by-year cash flow simulation from your current age until your projected life expectancy (or your spouse's, whichever is later). Each year, the engine looks at:

• Inflow: Employment, CPP, OAS, mandatory RRIF minimums, optional RRSP melt withdrawals, investment income from non-registered accounts, and any one-time inflows.
• Gap analysis: compares net cash to your "Target Spend".
• Drawdown: pulls from accounts per your selected strategy if there's a deficit.
• Reinvestment: fills TFSA room, then RRSP room, then invests the rest in your designated non-registered surplus account.
• Growth: applies investment returns to remaining balances.

When a person dies in the simulation, assets roll over tax-free to a surviving spouse (keeping each account's cost base); with no survivor, the estate pays tax on a deemed disposition — the full remaining RRSP/RRIF is taxed as income, and unrealized capital gains are deemed realized.

RRSP Last (defer taxes): draws non-registered accounts first (lowest tax per dollar), then TFSA (zero tax), leaving RRSPs untouched to defer taxes as long as possible. Deferral isn't free: the RRSP keeps growing, forced RRIF withdrawals get larger after 72, and whatever remains is fully taxed at death — so this strategy may result in a higher tax bill for your estate and higher total lifetime tax.

RRSP First (early melt): draws from RRSPs first to "melt" the balance early at lower tax brackets, potentially reducing large tax bills at age 72 or at death.

For couples, the engine automatically calculates the optimal amount of eligible pension income (like RRIF withdrawals) to "split" with a lower-earning spouse.

• Optimization: tests splitting percentages up to 50% to minimize the household's combined tax bill.
• OAS impact: considers whether splitting helps a spouse avoid or reduce OAS clawback.
• Credits: preserves credits like the Age Amount where beneficial.

Assets grow based on the return rates set in the Returns panel. The engine separates Yield (Dividends/Interest) from Capital Growth.

• RRSP/TFSA: each account grows at its own whole-account return, reinvested and tax-sheltered — no yield/gains split needed.
• Non-Registered: yield is paid out as cash (and taxed) each year; only the equity slice appreciates. Growth doesn't raise the ACB, so unrealized gains build up until realized by sales, Fund Turnover, or death.

Multiple non-registered accounts

Each person can hold several non-registered accounts (e.g. a GIC ladder, a dividend portfolio, a growth ETF account):

• Withdrawals minimize realized gains: sells from the account with the highest cost-base ratio first — the least realized gain per dollar raised.
• Surplus goes to one account: leftover cash each year is invested into the account marked Surplus.
• At death: a surviving spouse inherits each account as-is, keeping its own ACB and mix.

Rebalancing vs. drift

The Rebalance Annually toggle controls each account's mix over time: on pulls it back to your chosen weights every year; off lets the equity share drift up while yield income stays flat in dollars. The separate Fund Turnover input models the annual tax drag of funds that realize gains internally — it applies every year, whether or not rebalancing is on.