§ Calculator · Tax

RRSP vs TFSA

What this is

Which account wins on a pre-tax dollar basis?

The math is actually simple: whichever account taxes you at a LOWER rate is the winner. RRSP wins when your retirement marginal rate is below your current. TFSA wins when it’s above. Compounding cancels out.

·RRSP, contribute pre-tax. Tax is deferred. Pay tax at your retirement marginal rate when you withdraw.
·TFSA, contribute after-tax. Tax-free growth. Withdrawals never taxed.
·High earner now, low income in retirement? RRSP wins.
·Low earner now (student, early career), high income later? TFSA wins.
·Same rate now and later? Mathematically identical outcome.

Pre-tax amount (CAD)Current marginal rate

Retirement marginal rate

Expected return

Years until withdrawal

RRSP final wealth

$30,043

TFSA final wealth

$24,464

Rate Δ (current − retirement)

13.0%

RRSP wins by $5,579

Educational. Not financial advice. Real-world choice also considers OAS clawback, GIS, attribution rules, contribution room, employer match, and estate planning.

Disclaimer

Educational, not financial advice. Output is generated by an AI assistant using simplified assumptions. Tax rates, contribution limits, and benefit amounts change annually; confirm with a CFP, CPA, or the relevant Canadian regulator (CRA, FSRA, OSC, IIROC) before acting.