RRSP vs TFSA Calculator
Compare RRSP and TFSA growth after tax, using your own tax rates.
The key question: tax now or tax later?
With an RRSP you get a tax deduction now, but you pay tax on every dollar you take out. With a TFSA you put in money you have already paid tax on, and withdrawals are tax-free. So the real comparison is between your tax rate today and your tax rate in retirement.
What the numbers show
If your tax rate when you withdraw is the same as today, the two accounts end up equal. If your rate in retirement will be lower, the RRSP comes out ahead. If it will be higher, the TFSA wins. For example, setting aside $10,000 at 5% for 25 years gives about $33,864 before tax in the RRSP. At a 25% retirement rate, that is about $25,398 after tax, against about $23,704 for the TFSA when your rate now is 30%.
Other things to weigh
- RRSP room is 18% of last year’s earned income up to a yearly dollar maximum set by the CRA. TFSA room is $7,000 for 2026.
- Withdrawals from an RRSP can affect income-tested benefits in retirement, while TFSA withdrawals do not.
- Invest the RRSP tax refund too, or the comparison understates the RRSP.
This is general information, not tax advice. For your personal situation, speak with a qualified adviser.
Frequently asked questions
Should I use the TFSA first?
It depends on your income now and later, your room and your goals. A lower income now often favours the TFSA, and a higher income now often favours the RRSP.
Does the RRSP refund matter?
Yes. If you invest the refund as well, the RRSP gains the extra. This comparison already assumes the RRSP and TFSA each start from the same pre-tax amount.
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