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 marginal rate rather than a rule of thumb.

Your Numbers

A one-tap starting point. Adjust anything below.
$85,000
$
Your marginal tax rate today: 31.2%
$9,000
$
Enter it as pre-tax income. 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: 21.1%
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. Marginal rates combine federal and provincial brackets and are an estimate; they do not include the Ontario surtax, credits, or clawbacks. This is a teaching tool, not a plan. 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.

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 combines the federal marginal rate and your province's marginal rate at the income you enter, using 2026 CRA and provincial brackets. Your retirement rate is estimated from the income band you pick. These are marginal-rate estimates for planning; they do not model the Ontario surtax, tax credits, or OAS clawback, so treat the result as a strong signal, not a filed return.

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 trigger the OAS clawback (which begins around $93,000 of net income in 2026) and reduce GIS. TFSA withdrawals do not count as income for these tests, which is a real advantage for lower-income retirees and a reason the TFSA can win even when the raw math is close.

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 TFSA's freedom, and why the two accounts are often used together rather than one instead of the other.