RRSP vs TFSA Calculator
See which account actually nets you more after-tax dollars, based on your real current and expected retirement tax brackets — not a generic rule of thumb.
What this calculator does
Starting from the same amount of take-home pay you're willing to set aside each year, it compares what you'd actually keep, after all tax, from an RRSP versus a TFSA. The RRSP side accounts for the tax deduction you get today and the tax you'll pay on withdrawal; the TFSA side is simpler since there's no deduction and no tax ever on withdrawal. This is the comparison that actually matters — not just which account grows to a bigger number, but which one leaves more in your pocket.
Who this is for
Anyone deciding where to direct a limited amount of savings between an RRSP and a TFSA, especially useful if your income (and tax bracket) is likely to be meaningfully different in retirement than it is today — which is the single biggest factor in which account wins.
How this calculator works
Because RRSP contributions are tax-deductible, the same take-home dollars actually buy you more pre-tax contribution room in an RRSP than the face value you enter — specifically, your contribution amount divided by (1 minus your current tax rate). That larger pre-tax amount grows for your chosen number of years at your expected return, then gets taxed at your expected retirement rate on the way out. For the TFSA, your contribution amount goes in as-is (no deduction), grows tax-free, and comes out completely tax-free.
Worked example
$7,000/year in take-home savings, 25 years to grow, 43% current tax rate, 30% expected retirement rate, 6% annual return: the RRSP side effectively contributes $7,000÷(1−0.43) = $12,281 pre-tax each year, which compounds to a larger pre-tax balance, then loses 30% to tax on withdrawal. The TFSA side compounds the plain $7,000/year with no deduction upfront and no tax on the way out. At these specific rates, with a 13-point gap between your current and future tax bracket, the RRSP comes out meaningfully ahead in after-tax terms — run your own numbers above, since this flips entirely if your retirement tax rate is expected to be equal to or higher than your current rate.
Contribution comparison, side by side
Run the calculator above to see your RRSP and TFSA after-tax outcomes compared.
RRSP vs TFSA: the core differences
| Feature | RRSP | TFSA |
|---|---|---|
| 2026 contribution limit | $33,810 or 18% of 2025 earned income, whichever is lower | $7,000 |
| Lifetime cumulative room | Carries forward indefinitely, no lifetime cap | $109,000 if eligible since 2009 |
| Tax on contribution | Deductible — reduces taxable income now | Not deductible — post-tax dollars in |
| Tax on growth | Tax-deferred | Completely tax-free |
| Tax on withdrawal | Fully taxed as income at your marginal rate that year | Completely tax-free, always |
| Withdrawn room | Not restored | Restored on January 1 of the following year |
| Effect on income-tested benefits | Withdrawals count as income — can trigger OAS clawback, reduce GIS | No effect whatsoever — never counted as income |
| Mandatory withdrawals | Must convert to RRIF by end of the year you turn 71, minimum withdrawals begin | None, ever |
Common mistakes
- Assuming RRSP is always better because of the upfront tax refund. The refund isn't free money, it's a deferral. If your tax rate in retirement ends up the same as or higher than it is now, the TFSA comes out ahead or equal, and the RRSP withdrawal tax can also trigger benefit clawbacks the TFSA never touches.
- Not reinvesting the RRSP tax refund. For the RRSP side of this comparison to actually match its potential, the tax refund itself needs to be invested too, not spent. If you plan to spend the refund, the TFSA typically becomes the stronger choice by default.
- Ignoring the OAS clawback and benefit effects. A large RRIF withdrawal in a single year can push you over the OAS clawback threshold, an effect this calculator doesn't model, since it depends on your total income picture, not just this one withdrawal.
- Treating it as all-or-nothing. Most people benefit from using both accounts over their working life, not picking one exclusively; use this calculator to guide how you prioritize additional room, not to rule one account out entirely.
Related calculators
Frequently Asked Questions
What are the 2026 RRSP and TFSA contribution limits?
The RRSP dollar limit for 2026 is $33,810, or 18% of your 2025 earned income, whichever is lower, plus any unused room carried forward from previous years. The TFSA limit for 2026 is $7,000, unchanged for a third straight year, bringing the cumulative lifetime limit to $109,000 for anyone who has been an eligible Canadian resident aged 18 or older since the TFSA started in 2009.
Is RRSP or TFSA better?
It depends entirely on whether your tax rate now is higher or lower than your expected tax rate when you withdraw. RRSP wins if you're in a higher tax bracket today than you expect in retirement, since you get the deduction now at your high rate and pay tax later at a lower rate. TFSA wins if your current rate is lower than or equal to your expected future rate, since there's no benefit to deferring tax you're not saving on. Neither is universally better; it's about the direction your tax rate moves.
Does withdrawing from an RRSP affect government benefits?
Yes. RRSP/RRIF withdrawals count as taxable income and can trigger the Old Age Security (OAS) clawback if your total income exceeds the threshold, and can reduce income-tested benefits like GIS. TFSA withdrawals are not counted as income at all and never affect any income-tested benefit or credit, which is a real advantage for TFSA beyond the tax rate comparison alone.
Can I contribute to both RRSP and TFSA in the same year?
Yes, and for most people who can afford it, this is the ideal approach rather than choosing one exclusively. A common strategy is to max the TFSA first for its flexibility and zero withdrawal tax, then use the RRSP for additional room, particularly in higher-income years where the deduction has more value.