RRSP vs TFSA calculator
Enter your province, your income now, what you can put away, how long it will grow and your income in retirement. You see which account leaves you more, and why.
Free · no signup Runs in your browser
Is an RRSP or a TFSA better?
Neither wins by default. The RRSP gives a tax refund now and is taxed when you withdraw; the TFSA gets no refund but is never taxed. With the same return and the same tax rate at both ends the two come out equal. An Ontario resident earning $90,000 who puts $7,000 of take-home pay away for 25 years at 5% and expects $40,000 of other income in retirement ends with $27,276.16 from the RRSP and $23,704.48 from the TFSA.
Why we built this calculator
The usual answer, 'RRSP if your tax rate will be lower in retirement, TFSA if it will be higher', is right but hard to apply, because most people do not know their marginal rate now, let alone in 25 years. This calculator works both rates out from the brackets for your province, including Ontario's surtax, and shows the result in dollars.
It also keeps the comparison fair. Putting $7,000 into a TFSA is not the same as putting $7,000 into an RRSP, because the RRSP contribution comes with a refund. So the RRSP contribution here is sized so that, after the refund, it costs you exactly the same take-home amount.
It runs in your browser. Nothing you enter is sent anywhere, and there is no sign-up. For your tax rate see the marginal tax rate calculator.
When to use it
- Deciding where to put this year's savings
- Seeing how a high income now changes the answer
- Testing a lower or higher retirement income
- Comparing before you use your FHSA, which is deductible and tax free on a first home
Mistakes it helps you avoid
- Comparing equal contributions instead of equal after-tax costs.
- Ignoring the tax on RRSP withdrawals.
- Forgetting that RRSP income can reduce OAS and the GIS in retirement, which favours the TFSA.
- Assuming your tax rate will be the same in retirement as now.
How the comparison is worked out
Both accounts start from the same after-tax cost and grow at the same return.
RRSP contribution X such that X − [tax(income) − tax(income − X)] = after-tax amountTFSA balance = after-tax amount × (1 + return) ^ yearsRRSP before tax = X × (1 + return) ^ yearswithdrawal each year = RRSP before tax ÷ years of withdrawaltax on withdrawal = [tax(retirement income + withdrawal) − tax(retirement income)] × yearsRRSP after tax = RRSP before tax − tax on withdrawal
Tax is worked out with the same 2026 federal and provincial brackets and basic personal amounts as the income tax calculator, including Ontario's surtax. The contribution is found by solving for the amount whose cost after the refund equals what you would put in a TFSA, so the refund is part of the RRSP's advantage and not left over. Spreading withdrawals over several years keeps each year's tax lower than one lump sum would. OAS recovery tax and GIS reductions are not modelled, and they can make an RRSP withdrawal cost more than the bracket tax alone.
Worked example: Ontario, $90,000 now, $40,000 in retirement
You earn $90,000 in Ontario and will put $7,000 of take-home pay away for 25 years at 5%. In retirement you expect $40,000 of other income and withdraw over 10 years.
- RRSP contribution that costs $7,000 after the refund$9,950.25
- Tax refund$2,950.25
- RRSP after 25 years at 5%$33,695.07
- Tax on $3,370 a year for 10 years on top of $40,000$6,418.91
- RRSP after tax$27,276.16
- TFSA: $7,000 grown the same way$23,704.48
The RRSP leaves $27,276.16 and the TFSA $23,704.48, so the RRSP is ahead by $3,571.68.
If your retirement income were $90,000, the same as now, the two accounts would come out equal to within a dollar. At a $50,000 income now and $90,000 in retirement the TFSA wins by $3,103.98.
What tips the balance
The RRSP wins when your tax rate on withdrawal is lower than the rate at which you got the refund, which is typical for a high earner who retires on a modest income. The TFSA wins when the rate is the same or higher, for example a young worker in a low bracket who later earns more, and it wins more clearly if RRSP income would trigger OAS recovery tax or reduce the GIS. When the rates are equal the two are the same. Contribution room differs too: see the TFSA contribution room calculator and the RRSP contribution limit calculator, and the RRSP tax refund calculator for the refund alone.
Terms on this page
- Marginal tax rate
- The rate of tax on your next dollar of income, which sets the value of a deduction.
- After-tax cost
- What a contribution costs you once the tax refund has been taken into account.
Common questions
When is an RRSP better than a TFSA?
When your tax rate when you withdraw will be lower than the rate at which you get the refund now.
When is a TFSA better?
When your rate at withdrawal will be the same or higher, or when RRSP income would reduce OAS or the Guaranteed Income Supplement.
Can I do both?
Yes. Many people use the RRSP while in a high bracket and the TFSA for flexibility. Each has its own contribution room.
Does the calculator include the refund?
Yes. The RRSP contribution is sized so that after the refund it costs the same as the TFSA deposit, which is what makes the comparison fair.
Why does the withdrawal period matter?
Taking the money out over several years keeps each year's income lower, so each year's tax is usually lower than on one lump sum.
Where these numbers come from
- Canada Revenue Agency — Canadian income tax rates for individuals, current year The 2026 federal and provincial brackets, modified June 25, 2026.
Last verified 2026-10-25 Rates on this page are checked against the sources above at least once a year, and whenever the governing authority announces a change. Spotted something out of date? Tell us and we will fix it.
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