Last updated: 2026 assumptions reviewed. Assumptions & sources
Tools & Resources

RRSP vs TFSA: See the Real Dollar Difference

Put in your income, province, and what you can invest. The calculator works out your marginal tax rate and shows, in dollars, which account leaves you with more after tax. Move the sliders and watch it change.

The whole question, in one line
Your tax rate todayvsYour tax rate in retirement
That single comparison decides it. The calculator runs it in dollars, using your province and your own marginal rate for 2026.

Your Numbers

A one-tap starting point. Adjust anything below.
$85,000
$
Your marginal tax rate today: 29.7%
$9,000
$
Enter the slice of your salary you would set aside before tax comes off it. We fund the RRSP with the full amount and the TFSA with what is left after tax on it, so the two are compared fairly.
25 years
6.0%
A balanced Canadian portfolio has historically returned 5 to 8 percent long term. 6 percent is a sober planning number.
Estimated marginal rate in retirement: 19.1% on about $51,000 of taxable income a year
RRSP comes out ahead

$0 more

after tax, in your pocket by the year you use the money.

After-tax value over time. The shaded gap is the difference between the two accounts.

How this works: we compare the same slice of pre-tax income going into each account, then tax the RRSP at your estimated retirement rate and leave the TFSA untouched. Both rates come from the site's shared 2026 tax engine. It prices the next dollar of income against federal and provincial brackets, basic personal amounts, the Ontario surtax, provincial low-income tax reductions and the Quebec federal abatement. Several things sit outside the model. The Ontario Health Premium arrives in steps and is capped at $900 a year, so folding it into a rate would overstate what an extra dollar of retirement income costs. Pension and age credits, the OAS recovery tax, the GIS reduction, refundable credits such as the GST credit, and anything particular to your own return are all left out too. Treat it as a teaching tool. A fee-only planner can run your exact numbers.

Quick definitions

TFSA
Tax-Free Savings Account. Funded with after-tax income. Growth and withdrawals are completely tax-free. 2026 limit: $7,000. Cumulative room since 2009: $109,000.
RRSP
Registered Retirement Savings Plan. Contributions cut your taxable income now. Growth is sheltered. Withdrawals in retirement are taxed as income. 2026 limit: 18% of prior-year earned income up to $33,810.
FHSA
First Home Savings Account. A deduction like the RRSP and tax-free withdrawals like the TFSA, for a first home. $8,000/year, $40,000 lifetime.

The one thing that decides it: whether your tax rate is lower in retirement than it is today. If it is, the RRSP wins. If it is higher, the TFSA wins. If they are about the same, it comes down to flexibility, and the TFSA usually gets the nod.

Married, with one of you earning more? The RRSP question changes: whose return carries the deduction, and whose hands hold the money later. The Spousal RRSP Optimizer gives your household a straight answer.

Tools Dan uses

Open the account you chose

Whichever way the math pointed, an account only helps once it is funded. Wealthsimple opens an RRSP or a TFSA in minutes, no minimum, commission-free Canadian ETFs.

Open a Wealthsimple account →

Affiliate link, no cost to you. How this works. See the full list of tools Dan recommends.

The order that usually serves a household

The account comes last. Giving goes first, while the money is still in your hands and the habit is still yours to form. Then an emergency fund, held somewhere you can reach it without borrowing, so one broken furnace does not undo a year of saving. Then the account this page points you to, filled steadily, for years. That order has served plenty of households better than a clever choice of container ever has.

Both of these accounts are containers. The stewardship happens before the money ever reaches one. If you want the longer version of this decision, RRSP or TFSA: which one first walks through it in prose, the Christian decision guide takes up the heart questions underneath it, and if the RRSP is where you are headed it is worth reading what those withdrawals cost in tax later before you start.

Frequently Asked Questions

Should I put money in my RRSP or TFSA?

The deciding factor is your tax rate now versus in retirement. If you earn over $100,000 and expect a lower income in retirement, the RRSP usually wins, because you get the deduction at a high rate and withdraw at a lower one. Under $55,000, the TFSA often wins, because your rate today is already low and the flexibility is worth more. Between those, it is close, and this calculator shows you the actual dollar gap for your numbers.

How does the calculator figure out my tax rate?

It runs your income through the site’s shared 2026 tax engine and prices the next dollar you earn: federal and provincial brackets, the basic personal amounts, the Ontario surtax, the provincial low-income tax reductions, and the Quebec federal abatement. Your retirement rate is priced the same way on the income band you choose. Left out: the Ontario Health Premium, which is charged in steps and capped at $900 a year, the pension and age credits, income-tested benefits such as OAS and GIS, and refundable credits. Read the figure as a strong planning signal for your own numbers.

Can I contribute to both RRSP and TFSA in the same year?

Yes. They are separate accounts with separate room, and many Canadians use both. A common approach is to contribute to the RRSP, then use the tax refund to fund the TFSA each spring, so a single slice of income ends up working in both.

Does RRSP income affect my OAS or GIS in retirement?

Yes. RRSP and RRIF withdrawals are taxable income, and a large balance can push your net income past the OAS recovery threshold, about $95,000 for 2026, and shrink GIS. TFSA withdrawals do not count as income for either test, which is a real advantage for lower-income retirees and a reason the TFSA can win even when the raw math is close. The recovery threshold is reset every year, so check the current figure on canada.ca before you plan around it.

What happens to my RRSP at age 71?

You must convert it to a RRIF by December 31 of the year you turn 71. The RRIF then requires a minimum withdrawal each year based on your age. Those forced withdrawals are part of why some people prefer the freedom of a TFSA, and part of why most households end up holding both accounts.