Free, educational Canadian retirement tools · figures reviewed October 30, 2026Part of the MITEY network
    RetirementPlanner.ca
    Free tool 2026 rules

    RRSP vs TFSA calculator

    RRSPs give you a deduction now and tax the money when it comes out; TFSAs give no deduction but nothing is taxed later. With the same pre-tax dollars, the comparison comes down to one question: is your tax rate when you contribute higher or lower than when you withdraw?

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    Same pre-tax dollars, two accounts

    The RRSP gets the full amount (its refund is reinvested); the TFSA gets what's left after tax today.
    Try the retirement tax tool to estimate yours.
    Include OAS recovery (+15%) or lost GIS if RRIF income could trigger them.
    RRSP after tax
    $17,778
    after $5,926 tax on withdrawal
    TFSA
    $16,593
    from $4,900 contributed
    Ahead
    RRSP
    by $1,185

    After-tax value over time

    $0$5k$10k$15k$20k0y4y8y12y16y20y24y
    RRSP (after withdrawal tax)TFSA
    RRSPTFSA
    Invested$7,000$4,900
    Tax refund today$2,100—
    Value after 25 years$23,704$16,593
    Tax on withdrawal$5,926$0
    After-tax value$17,778$16,593

    The rule of thumb this shows: when your tax rate on withdrawal equals today's rate, both accounts end up the same. A lower rate later favours the RRSP; a higher one (including OAS recovery tax or GIS reductions from RRIF income) favours the TFSA. 2026 limits: RRSP $33,810 (18% of prior-year earned income), TFSA $7,000. Room, refunds and employer matching aren't modelled.

    Educational estimate, not advice. Results depend on your inputs and the assumptions listed. They are not a prediction of returns or a recommendation. Check benefit amounts in your My Service Canada Account and tax details with the CRA. Read the disclaimer.

    How to use this tool

    1. Enter the pre-tax amount you could save.
    2. Set your marginal rate now and your expected rate on withdrawal.
    3. Compare after-tax values and the break-even tax rate.

    Why the rates matter more than the account

    Put $7,000 of pre-tax income in an RRSP at a 30% marginal rate and the whole $7,000 is invested (the refund effectively pays the tax). In a TFSA you invest $4,900 after tax. If both grow at the same rate and the RRSP money is later taxed at 30%, you end up with exactly the same after-tax amount.

    The RRSP pulls ahead when the withdrawal rate is lower — common for people whose retirement income will be smaller than their working income. The TFSA pulls ahead when the withdrawal rate is higher, which can happen when RRIF income triggers OAS recovery tax (an extra 15%) or reduces the Guaranteed Income Supplement.

    Things the simple comparison misses

    • Whether you actually invest the RRSP refund (the comparison assumes you do).
    • Employer matching through a group RRSP, which can dominate the decision.
    • Flexibility: TFSA withdrawals are tax-free and the room comes back the next calendar year.
    • Room: 2026 limits are $33,810 for RRSPs (18% of prior-year earned income) and $7,000 for TFSAs.

    Frequently asked questions

    What tax rate will I have in retirement?
    Use the retirement income tax estimator with your expected CPP, OAS, pension and RRIF income to estimate your marginal rate.
    Does TFSA income affect OAS or GIS?
    No. TFSA withdrawals aren't taxable income, so they don't affect the OAS recovery tax or income-tested benefits like GIS.
    Can I do both?
    Yes, and many people do. The order of priority depends on rates now and later, matching, and how much flexibility you need.

    Official sources

    Figures checked October 30, 2026. Rules and amounts change; confirm current details on the official pages above.