RRSP vs TFSA calculator: where to save first
If your tax rate when you withdraw will be lower than your tax rate today, the RRSP usually leaves you more after tax. If the two rates are the same, the RRSP and the TFSA finish equal, as long as you reinvest the RRSP tax refund. If your rate in retirement will be higher, the TFSA wins. With the calculator's starting values, $6,000 a year for 25 years at 7%, a 40% tax rate today and 25% in retirement, the RRSP finishes about $101,500 ahead after tax.
RRSP vs TFSA comparison
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How to use the RRSP vs TFSA calculator
Enter what you plan to save, your two tax rates and an expected return, and the results update as you type. Your inputs are kept in the page address, so you can bookmark a scenario or send it to your advisor.
The after-tax amount you plan to save each year, the same for both accounts. The starting value is $6,000. The calculator does not check your contribution room: for 2026 the TFSA limit is $7,000, and the RRSP limit is 18% of last year's earned income up to $33,810.
The rate on your next dollar of income today, which sets the value of the RRSP deduction. The starting value is 40%.
The rate you expect to pay when the RRSP money comes out. The starting value is 25%.
The average annual return and the number of years until you withdraw, the same for both accounts. The starting values are 7% and 25 years.
On by default. The RRSP contribution is grossed up to include the refund, so $6,000 at a 40% rate becomes $10,000 in the RRSP: the pre-tax amount that costs you $6,000 once the refund comes back. Turn it off and both accounts get the same $6,000, with the refund left out of the comparison.
How to read your result
The calculator follows one contribution a year in each account to the end of your horizon, then takes tax off the RRSP at your retirement rate.
Recommendation
The headline names the account that leaves you more after tax at the end of the horizon, and by how much. With the refund reinvested, the winner depends only on the two tax rates: the return and the number of years change the size of the gap, not its direction. When the two results are within a dollar, it says both are roughly equal.
The RRSP and TFSA table
Total contributed, investment growth, tax on withdrawal, after-tax value and effective return, side by side. Tax on withdrawal is the whole RRSP balance at your retirement rate; TFSA withdrawals are tax free. The after-tax value row, highlighted, is the one to compare.
Effective return
The annual growth rate from what went in to what you keep. With the refund reinvested, the RRSP's contributions include the refunds, so its effective return can look lower than the TFSA's (2.87% against 4.06% with the starting values) while its after-tax value is higher. Compare the after-tax values first.
Growth over time
The year-by-year table shows both balances before tax: every year up to ten, otherwise the first five and the last three. The RRSP balance is larger partly because a share of it belongs to the CRA, which is why the after-tax row matters more than the balances.
RRSP or TFSA inside a full plan
The TFSA is often underestimated by high earners. Consider this: TFSA withdrawals are completely invisible to the tax system. They don't affect OAS eligibility, GIS calculations, or any income-tested benefit.
Kaetyn St. Hilaire, CFA, in RRSP vs TFSA: a strategic guide for high-income earners
For most high earners the answer is both. A common approach is to contribute to the RRSP until your income falls to a target bracket, then direct the rest of your savings to the TFSA. RRSP vs TFSA for high-income earners walks through when each one deserves priority.
The right split depends on your current and future tax rates, whether you have a pension, your spouse's income and your estate plan. Spousal RRSPs add another lever for couples. Putting those pieces together is the work of financial planning in Calgary with Kaetyn.
Kaetyn on YouTube: How to Spend Down a $1.7 Million RRSP Without Getting Crushed by Taxes
RRSP vs TFSA questions
Answers drawn from the calculator's own rules and assumptions, and from the CRA.
It depends on your tax rate today against your tax rate when you withdraw. If today's rate is higher, the RRSP usually leaves you more after tax, provided the refund is saved rather than spent. If the rates are equal, the two finish level. If you expect a higher rate in retirement, the TFSA comes out ahead.
It invests the same after-tax amount each year in both accounts at your expected return. With the refund reinvested, the RRSP contribution is grossed up by your current tax rate. At the end of the horizon it takes tax off the RRSP at your retirement rate and compares what you keep from each account.
The TFSA limit for 2026 is $7,000, and unused room carries forward. The RRSP limit is 18% of your previous year's earned income up to $33,810 for 2026, less any pension adjustment, plus unused room from earlier years. Your exact room is in your CRA My Account.
The RRSP's advantage comes from the refund. If the refund is spent, part of the benefit is spent with it. Switch the reinvest option off in the calculator to see the difference, or put the refund into your TFSA so it keeps working tax free.
It is a simplified comparison for educational purposes. It does not check contribution room, and it does not account for income splitting, OAS clawbacks or other personal factors. It also taxes the whole RRSP at one retirement rate, while in practice withdrawals are spread over many years.
Related articles
- RRSP vs TFSA: a strategic guide for high-income earners When each account wins Retirement Spending Playbook Free PDF guide
- Spousal RRSPs: the income-splitting strategy Two sets of brackets
- What happens to your RRSP, TFSA and RRIF when you are gone Accounts at death
- The hidden cost of US investments in your TFSA Withholding tax
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