RRSP vs TFSA Calculator
Both accounts let your money grow tax-free — the difference is when you pay tax. This calculator compares an RRSP and a TFSA fairly (the RRSP refund is reinvested) so you can see which one builds more wealth at your income and tax rates.
How to use this calculator
- Enter after-tax dollars you can save per year.
- Enter years until you withdraw.
- Enter expected annual return.
- Enter your annual income now.
- Enter province or territory.
- Enter expected tax rate in retirement.
- Your results appear instantly below and update as you change the numbers.
How this calculator works
The RRSP gives you a tax deduction now, so it is cheaper to fund: for every after-tax dollar you commit, the refund lets you contribute more. The TFSA gives no deduction but every withdrawal is tax-free. This calculator grosses the RRSP contribution up by your refund and reinvests it, then withdraws the RRSP at your expected retirement tax rate — an apples-to-apples comparison. Worked example: an Ontario taxpayer earning $90,000 (marginal rate 29.7%) who saves $10,000 a year for 20 years at 6% and expects a 20% retirement rate ends with roughly $437,800 from the RRSP after tax versus $385,000 from the TFSA — the RRSP wins by about $52,800 because the deduction was taken at 29.7% and the withdrawal is taxed at 20%. Flip the rates and the TFSA wins. Roughly speaking, the RRSP wins if your retirement rate is lower than today's; the TFSA wins if it is higher.
Frequently asked questions
Which is better: RRSP or TFSA?
The RRSP is better if your marginal tax rate in retirement will be lower than it is today — the deduction saves you tax at today's higher rate and withdrawals are taxed at the lower one. The TFSA is better if you expect to pay more tax later (early career, income about to jump) or want tax-free withdrawals that don't affect OAS or GIS. For most Canadians mid-career, the RRSP is the bigger wealth builder; the TFSA wins on flexibility.
Can I contribute to both an RRSP and a TFSA?
Yes — and most people should. The 2026 RRSP limit is 18% of your 2025 earned income, capped at $33,810; the 2026 TFSA limit is $7,000 (lifetime room since 2009 is $109,000 if you have been eligible all along). A common strategy is to contribute to the RRSP up to the point your income drops a bracket, then fill the TFSA with the rest.
What about the Home Buyers' Plan (HBP)?
The HBP lets you withdraw up to $60,000 from your RRSP tax-free for a first home, repaid over 15 years — so an RRSP can double as first-home savings. The TFSA has no such rule but also no repayment requirement. The FHSA (First Home Savings Account) combines both benefits: deductible contributions like an RRSP and tax-free withdrawals like a TFSA, up to $8,000 a year and $40,000 lifetime.
Disclaimer: Results are estimates for general information only and do not constitute financial, tax, or legal advice. Figures reflect the current tax year and may change. Always confirm current limits and consult a qualified professional before making decisions. Official figures: canada.ca tax rates · CPP rates · CMHC mortgage insurance.